GFun Industrial Corp (聚紡), which makes coated and laminated fabrics and functional clothes, yesterday said it expects annual sales to rise more than 30 percent to NT$12 billion (US$39.84 million) this year from NT$905.95 million last year on strong demand for functional apparel.
The company has eight production lines in Taiwan that make garments for its own brand, “Gfun,” and other local brands, such as Atunas and Traveler, GFun chairman Tsai Chiu-hsiung (蔡秋雄) said.
The company also has 20 production lines in Thailand that produce functional garments for global brands ,including Jack Wolfskin, Tsai said, adding that GFun is to increase its number of workers at the two sites to more than 1,100, from 600 the previous year.
Tsai made the remarks at a ceremony at GFun’s factory in Taoyuan County to donate its functional clothes to a local charity.
THAI FACTORIES
Tsai said that as Taiwan does not have many free-trade agreements, GFun mainly produces its apparels for global brands in Thailand.
Moreover, the Thai factories can offer faster delivery because of the higher numbers of workers available there, he said.
“It is difficult to find workers in Taiwan because many people choose the service industry instead,” he said.
With the addition of 10 new production lines in its Thai factories this year, GFun expects its apparel division’s sales to rise to NT$200 million this year, from less than NT$100 million last year, Tsai said.
His upbeat forecast comes as the global textile industry is picking up steam this year from last year, when most manufacturers were digesting heavy inventories after customers turned cautious amid a tepid global economy.
“Inventory levels finally declined to normal levels at the start of the year,” Tsai said.
About 70 percent of the clothes GFun makes are autumn and winter wear priced at between NT$2,500 and NT$3,000, while 30 percent are spring and summer wear priced at between NT$800 and NT$1,000.
UNIFORMS
The company also manufactures uniforms for the nation’s army and police force, as well as employees of Taiwan High Speed Rail Corp (台灣高鐵).
“We also sell functional fabrics for police uniforms in Europe,” Tsai said.
The fabrics used and clothes made for the army and police offer the highest gross margin among its products, and orders from these clients are more reliable than global brands, he said.
In the first four months of this year, GFun posted revenue of NT$383.6 million, up 19.42 percent from NT$321.22 million the previous year, according to the company’s filing with the Taiwan Stock Exchange.
Last year, the company had a profit of NT$30.52 million, or NT$0.89 per share, down 20.44 percent from NT$38.36 million, or NT$1.12 per share, a year ago, because of high global inventories, Tsai said.
While the company’s gross margin dropped to 14.98 percent last year from 17.39 percent in 2012, Tsai said the figure should improve this year, but did not provide detailed guidance.
GFun shares were unchanged at NT$32.30 yesterday, underperforming the over-the-counter GRETAI index, which was up 0.25 percent.
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