Huaqiang, China's largest plastic bag manufacturer based in Henan Province, has closed because of a national environmental drive that will impose limits on the use of plastic bags starting on June 1, local government sources said Tuesday.
The factory stopped production in middle January and its 20,000 employees are awaiting their fate, said Liu Henglie, director of commerce bureau of Suiping County, where the plant is.
All the machines in the factory will be sold although further details about the future of the factory and its workers remain unknown, according to the official.
The factory, belonging to the Guangzhou-based Nanqiang Plastic Industrial Ltd., is able to produce 250,000 tons of plastic bags at value of 2.2 billion yuan (US$305 million) per year.
A management official was quoted by a local newspaper (Henan Business Daily) as saying that the closure was caused by the environment drive against the use of plastic bags.
"Over 90 percent of our products are on the limit list," the official said. "As a result, the only way forward for the factory is closure."
The General Office of the State Council on January 9 ordered a ban on the production, sale and use of ultra-thin bags (defined as less than 0.025 mm thick) as of June 1. At the same time supermarkets and shops will be banned from giving free plastic bags to customers.