Hundreds of workers at a chemical plant in China’s Jiangsu Province demanded compensation after finding themselves locked out of the factory on Oct. 8, as police arrived at the scene.
Xuzhou Fengcheng Salt Chemical Co., based in Feng County, told employees on Oct. 9 that operations would not restart, leaving an estimated 800 to 900 workers facing transfers or receiving severance payments, according to a worker interviewed by the Chinese edition of The Epoch Times.
The worker, who provided only his surname, Gao, for fear of reprisal, said employees discovered that their access cards had been disabled when they returned after a week off for the National Day holiday.
“Things got quite heated on Oct. 8,” Gao said. He accused the company’s management of delaying a decision on compensation and said county officials eventually promised that workers would receive legally required payments.
A video posted on X on Oct. 8 by Chinese human rights monitor Yesterday shows a big group of workers and police officers at the facility. In one scene, a man holding a microphone addresses employees gathered around him.
Invoking Chinese labor law, the man discussed compensation and the possibility of giving employees two months to find other jobs, with full wages for the first month and a living allowance for the second. His identity, position, and authority to speak for the company could not be independently verified.
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Gao said Chinese internet police tracked down a video he posted of the gathering and ordered him to delete it.
From Suspension Notice to Closure
A company notice dated Sept. 28, posted on X by another Chinese human rights monitor, Li Ying, said production would be suspended beginning Oct. 1 due to industry market conditions and the company’s operating situation. It said the date for restarting operations would be announced separately.
Following the Oct. 8 gathering, the company instructed employees to assemble at 9 a.m. on Oct. 9 in the cafeteria rather than outside the factory, according to Gao. Photography and video recording inside were prohibited.
At the meeting, the company announced that production would not resume and presented a compensation plan.
The plan called for severance based on employees’ years of service. Payments below 50,000 yuan (about $7,500) would be made in a single installment, while larger amounts would be split into two, Gao said.
The company also offered workers the option to be transferred to affiliated businesses, but Gao said they opposed the transfers, particularly if they would have to relocate.
“We don’t want to be transferred,” he said. “We’re waiting for compensation.”
He estimated that some employees could receive approximately $9,000 to $10,500, depending on their wages and years of service.
Soda Ash Industry Faces Overcapacity
A 2017 profile credited to the Feng County Economic Development Zone described Fengcheng as a subsidiary of Wuxi Yiduo Group and said that the plant had an annual production capacity of 600,000 metric tons of soda ash, a chemical used in glassmaking and other industries. The profile said its operations would create approximately 2,000 jobs.
Gao blamed the factory’s financial problems on excess production capacity and prices falling below production costs.
“The more we produce, the more money we lose,” he said.
He estimated that production costs approximately $194 per metric ton, while the selling price had fallen to slightly over $120, compared to prices above $448 during stronger market conditions.
A June 3 assessment by China’s National Development and Reform Commission’s Price Monitoring Center found significant nationwide overcapacity. It attributed weak demand partly to the property-sector downturn and slower-than-expected consumption from manufacturers of glass used in solar panels.
An industry assessment published on Oct. 9 on China’s Ministry of Commerce commodity-price website reported that conventional soda ash producers continued to face losses in late September, while inventories remained elevated. The assessment said the industry’s oversupply was unlikely to ease in the fourth quarter of 2026.
Gao said many Fengcheng workers are in their 40s and 50s and face limited prospects of finding new jobs in the current economic environment.
The company has not specified when severance payments will begin, according to Gao. He said employees are concerned that the company may not have enough cash to pay them and that the promised compensation could be delayed.
Gu Xiaohua contributed to this report.
