Shoemaker Feng Tay Enterprise Co (豐泰鞋業), which supplies about one-sixth of Nike Inc’s footwear, reported a record-high net profit of NT$3.48 billion (US$108.7 million) for the first three quarters of this year, up 13.3 percent year-on-year, on the back of increasing orders and improving gross margin.
From January through September, the company’s shoe shipments increased 6.4 percent on a yearly basis to 70.62 million pairs, boosting its consolidated revenues by rising 6.5 percent to NT$43.68 billon over the period.
Gross margin improved by 2.57 percentage points to 23.03 percent year-on-year during the nine-month period, company data showed.
The improvement in margin could be attributed to recent capacity adjustments and new automated production lines, company spokeswoman Amy Chen (陳麗琴) said by telephone yesterday.
Chen said the company is aiming to ship 25 million pairs of shoes this quarter, up about 5 percent from a year earlier and 6 percent from last quarter, adding that the company is on track to meet its target.
That means a month-on-month increase in the company’s revenues this month and next month, Daiwa Capital Markets said in a client note on Thursday last week, after Feng Tay reported revenues of NT$4.42 billion for last month.
Chen said the company plans to increase capacity at its two production bases in India and Indonesia in the near term.
Production capacity in India and Indonesia accounts for 23 percent and 12 percent of the shoemaker’s total capacity respectively, she said.
Feng Tay operates one plant in the southern Indian town of Cheyyar, with an annual capacity of about 22 million pairs of shoes. The company plans to invest 800 million rupees (US$11.7 billion) in its second plant in India, she said.
The company is also acquiring land in Indonesia for a new plant, Chen said, without elaborating.
As for its core production base in Vietnam, Chen said Feng Tay has no expansion plans for its plants there, which takes up 51 percent of the company’s total capacity, as the company aims to focus on a newly built product development center in Vietnam.
Another Taiwanese shoemaker, Pou Chen Corp (寶成工業), also saw its net income and gross margin increase this year.
Pou Chen posted a net profit of NT$8.89 billion for the first three quarters of the year, indicating a 6.6 percent increase on an annual basis, while gross margin during the same period increased from 23.2 percent to 25.2 percent.
Shoemaking businesses account for nearly 70 percent of the company's overall revenues, Pou Chen said in a statement released on Monday last week.
The company produces more than 300 million pairs of shoes per year, the company’s Web site said.
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