Purmil to Pursue Resale... A Step Forward in Layoff Crisis Resolution

Purmil Pursues Resale... Discussed in 2nd Negotiation
3rd Negotiation on 4th This Month... Not a Withdrawal of Business Termination
Initial Agreement Reached but Sale Uncertain
Union and Dealers Suspend Collective Action for Now

[Asia Economy Reporter Song Seung-yoon] Purmil, a dairy company embroiled in controversy due to a sudden business closure notice, has decided to reinitiate its sale. Although the business closure itself has not been withdrawn, there has been substantial progress in the agreement as both labor and management have agreed to proceed with the sale process.

According to industry sources on the 1st, Purmil's labor and management held their second negotiation session from 2 p.m. yesterday at the headquarters in Yeongdeungpo-gu, Seoul, discussing solutions regarding the business closure issue and the policy on layoffs. On the management side, three people including CEO Shin Dong-hwan attended, while five employees including Union Chairman Kim Seong-gon sat at the negotiation table representing the union. The meeting lasted over three hours, during which management announced plans to pursue the resale process. Although restructuring was mentioned as a condition for the sale, no concrete agreement was reached, and both sides agreed to continue discussions four days later. The third negotiation session is scheduled to take place on the 4th of this month at 2 p.m., mediated by the Ministry of Employment and Labor.

Regarding the controversial voluntary retirement, Purmil has decided to extend the application deadline until the business closure date on the 30th of this month. They also plan to continue negotiations concerning the voluntary retirement severance pay, which was offered uniformly regardless of years of service. Previously, Purmil management caused controversy by suddenly accepting voluntary retirement applications while still negotiating with the union. CEO Shin announced on the 28th of last month that applications for voluntary retirement would be accepted from all general and technical staff until the 9th of this month. The offer included severance pay equivalent to two months’ combined regular wages and bonuses, retirement pay, and annual leave allowances as conditions.

Chairman Kim said, "There was sincerity shown in the second negotiation," adding, "It was a session where we could see the company's intentions a bit more compared to the first negotiation."

Earlier, Purmil decided to close its business on the 30th of this month and sent emails notifying about the business closure and layoffs to approximately 400 employees on the 17th of last month. The reason cited was ongoing deficits over several years, making it unsustainable. While the reinitiation of the sale offers a chance for recovery, the sale remains uncertain, and with less than a month left until the business closure date, some view a dramatic resolution as unlikely. Previously, LG Household & Health Care attempted to acquire Purmil but ultimately the deal fell through.

The aftermath of the Purmil situation is intensifying. Following dairy farmers and the union, truck drivers responsible for transporting Purmil products and franchise owners are also showing signs of collective resistance. A Purmil Franchise Owners Association has been formed, mainly among franchise owners in the Gyeongnam region. Franchise owners and truck drivers were considering initiating collective action starting from the second negotiation but have decided to monitor the progress of the negotiations for now. Earlier, dairy farmers and the union held rallies condemning management in front of Purmil’s headquarters in Yeongdeungpo-gu, Seoul, for two days starting on the 25th of last month. Distributors who had contracts to supply Purmil’s private brand (PB) products are also seeking alternative suppliers.

This content was produced with the assistance of AI translation services.