Garment manufacturer Quang Viet Enterprise Co (廣越) yesterday said it plans to spend between US$3 million and US$6 million this year for capital expenditure in an effort to expand capacity.
“The amount will be much lower than last year’s US$10 million, as the company has almost reached its near-term capacity expansion target,” a Quang Viet investor relations official said by telephone.
The official, who declined to be named, said that this year’s capital spending would mainly be used for establishing new production lines and purchasing equipment at the existing plants in Vietnam, instead of building new plants.
“We expect the expansion would stimulate this year’s output to grow between 8 and 10 percent annually from last year’s 9.07 million units of clothing, ” he told the Taipei Times.
Quang Viet, founded in 1995, manufactures down, primaloft, thermoball and padded jackets, as well as jackets made of goose down and duck down for global brands.
The company operates 305 production lines at its two factories in Vietnam and one in China, which are capable of making 850,000 units of clothing per month, company data showed.
The company is planning to add 15 production lines at its plant in Vietnam’s Tien Giang Province and build 15 lines at its new plant in Long An Province, which is set to begin production in the first quarter of this year, it said.
The new production lines would mainly produce high-end down jackets for the company’s global sportswear and functional clothing clients, including Adidas AG and North Face Inc.
Alongside producing more higher-margin down jackets, Quang Viet also expects its products’ average selling prices to improve from last year’s US$32.5 per unit.
Apart from its core business of down jacket manufacturing, the company said it also plans to acquire a knitwear plant in Vietnam this year to raise its competitiveness and market presence in the global garment industry.
Revenues from knitwear reached US$5 million last year, accounting for about 16 percent of the company’s total sales during the period, company data showed.
The new plant would help the company reach more clients and diversify its product portfolio further, it said.
Quang Viet shares yesterday dropped 1.08 percent to close at NT$137 in Taipei trading, while the benchmark TAIEX closed 0.26 percent lower at 9,318.12 points.
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