High production cost shuts NEXT Manufacturing at Katunayake FTZ 1,341 left unemployed

The company stated that the plant had been unprofitable for several years and, despite efforts to resolve the situation, it could no longer be made economically viable

NEXT Manufacturing, a key player in Sri Lanka’s apparel sector, has announced the immediate closure of its Katunayake Production Plant, citing unsustainable operating costs.   

The move, revealed in an official statement on May 19, 2025, has resulted in 1,341 job losses—marking one of the largest industrial layoffs in recent years.  

The company stated that the plant had been unprofitable for several years and, despite efforts to resolve the situation, it could no longer be made economically viable.   

This decision comes after careful consideration and evaluation of all alternative options, according to the company.  

While the manufacturing plant is shutting down, NEXT’s other operations in the Katunayake Free Trade Zone including the Embellishment and Product Development facilities will continue with reduced staff. Manufacturing operations in Andigama and Nawagaththhegama will remain unaffected.  

In response to the layoffs, NEXT has committed to offering enhanced severance packages, including a minimum of two months’ pay in addition to statutory entitlements.   

Furthermore, the company will also assist affected employees in finding alternative employment through coordination with local production sites.  

Meanwhile, a senior official of the Board of Investment told Daily Mirror that the company had informed the closure on May 19.  

“We are contemplating taking necessary actions for informing us at the last minute,” the official added.