Makalot Industrial Co (聚陽), a garment manufacturer for global clothing brands, yesterday reported that sales last month surged 22.6 percent to NT$1.92 billion (US$62.9 million) because of improving customer demand. The pickup ended 15 consecutive months of decline.
From January through last month, accumulated sales totaled NT$10.2 billion, a 6.3 percent decline compared with same period last year, the company said in a statement.
However, the pace of annual decline has narrowed from the first five month’s 11.1 percent, company data showed.
The company expects its growth momentum to extend into the coming two quarters, aided by improving sentiment in the global apparel industry and increasing orders from new brand customers, it said.
Taipei-based Makalot — which manufactures products for Gap Inc, Kohl’s Corp and Target Corp — said seven new customers are anticipated to make a significant contribution to revenue in the second half of this year.
The firm said it expects to secure orders from another five new clients by the end of the year, but declined to elaborate.
Sales from the US contribute nearly 80 percent to the company’ total revenue, while sales in Japan make up 20 percent, company data showed.
Apart from reaching out to more customers, Makalot is working on several capacity expansion projects at its Vietnamese and Indonesian plants this year.
The company plans to add between 50 and 60 production lines in Vietnam and Indonesia, which would lift its annual production capacity by nearly 10 percent, it said.
The firm — which also runs factories in Cambodia, the Philippines, Taiwan and China — said it is assessing the possibility of building new plants in Africa, given cheaper labor costs in the region.
Meanwhile, the company is also seeking opportunities to transform from a labor-intensive garment maker to a “smart” manufacturer, as part of its long-term strategy to boost operating efficiency and develop high-end apparel.
Makalot has set up several pilot “smart” production lines with 3D fitting technologies in Vietnam, company president and chairman Frank Chou (周理平) said at a launch event for an innovation center last month.
Makalot posted pre-tax profit of NT$386.5 million last quarter, a 50.7 percent plunge from a year earlier, dragged down by slowing sales and mounting foreign-exchange losses of nearly NT$50 million in the period.
In the January-to-March period, cumulative revenue fell 12.3 percent from NT$6.31 billion to NT$5.53 billion, according to a filing with the Taiwan Stock Exchange.
Makalot shares dropped 1.34 percent to close at NT$147 in Taipei trading yesterday, underperforming the broader market, which gained 0.55 percent to close at 10,404.79 points.
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