Taiwan's Far Eastern Textile Ltd (
Exports of Chinese textiles have rocketed since the abolition of a global quota system at the start of this year, and the US and EU fear that the flood of cheap China-made goods will leave their local industries in tatters.
However, "if [demand for goods from] China turns bad, my output from Southeast Asia and other areas outside China would pick up," said Douglas Hsu (
PHOTO: AP
Like many Taiwanese companies, Far Eastern was quick to use China as a manufacturing base because of its low costs. But it can still tap its other overseas factories to meet demand if production in China drops on the threat of protectionist quotas.
The company, Taiwan's largest maker of chemical fiber and textiles by capacity, derives 70 percent of its revenue from chemical fiber production and the rest from textiles. One-third of Far Eastern Textile's polymer production last year, or about 400,000 tonnes, came from its factories in China, according to the company's data for last year.
Hsu said Far Eastern Textile's production outside China has grown in the wake of US and EU restrictions on different categories of Chinese textiles, but he didn't give specific figures.
The European Commission in June set limits on 10 kinds of textile products from China. Six categories -- shirts, bras, flax yarn, sweaters, men's pants and blouses -- exceeded limits in July and August. Chinese and European officials met this past week in China to seek a compromise on the textile issue.
The US, meanwhile, has imposed emergency quotas on eight Chinese apparel products and is considering 11 more. The US and China have also agreed to hold another round of negotiations on textile shipments before the end of this month.
The textile industry in China could be hit by the new quotas in the second half of this year, but would not affect his business very much, Hsu said.
"We're cross-border," Hsu said. Overall, "the new quota has little impact on us."
Far Eastern Textile, also the world's fifth-largest chemical fiber maker by capacity, posted a modest decline in second-quarter net profit from the same period last year, Hsu said, but declined to give specific figures. The company reported net profit of NT$3.89 billion (US$120.4 million) in the second quarter of last year.
He said the company's chemical fiber business was hit by excess capacity in China.
"In the second quarter, China's excess capacity in the chemical fiber industry remained high, resulting in falling prices in the country," Hsu said.
"At the same time, the cost of raw material was rising," he said. "There was a [margin] squeeze."
Hsu said the huge market for chemical fibers and textiles in China has created many competitors.
"Businesses and trading activities are mostly liberalized now. Everyone's production volume is quite big ... so competition is getting fierce," he said.
He said the company's second-quarter net profit was also pressured by lower earnings from its investments.
The company holds stakes in 67 companies, more than half of which are publicly traded, according to Far Eastern Textile's annual report for last year.
Far Eastern Textile holds a 34 percent stake in mobile phone operator FarEasTone Telecommunications Co (
Far Eastern and FarEasTone are scheduled to report second-quarter results to the Taiwan Stock Exchange at the end of the month.
Far Eastern Textile reported first-quarter net profit of NT$2.75 billion, up 10 percent from the first quarter last year. The quarterly profit was boosted by non-operating income of NT$3.07 billion, according to the Taiwan Stock Exchange.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Taiwan has enough crude oil reserves for more than 100 days and sufficient natural gas reserves for more than 11 days, both above the regulatory safety requirement, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday, adding that the government would prioritize domestic price stability as conflicts in the Middle East continue. Overall, energy supply for this month is secure, and the government is continuing efforts to ensure sufficient supply for next month, Kung told reporters after meeting with representatives from business groups at the ministry in Taipei. The ministry has been holding daily cross-ministry meetings at the Executive Yuan to ensure
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
RSS