Eclat Textile Co (儒鴻) yesterday said it plans to spend between NT$800 million and NT$1 billion (US$26.35 million and US$32.94 million) to build a new plant in Taiwan this year to produce higher-margin digitally printed textile products.
The textile and garment manufacturer said its new facility is scheduled to begin production in the second of quarter of next year, with a monthly capacity of 200,000 yards (182.88km) of digital textile products.
Digital textile printing — an alternative to traditional rotary screen printing — refers to a printing technique aided by graphic design software, which could efficiently reduce waste during the manufacturing processes.
The expansion project is in line with its business strategy to differentiate itself from its competitors by providing high added-value products, Eclat said.
“The launch [of the new technology] should definitely help improve Eclat’s gross margin next year,” vice president Roger Lo (羅仁傑) said by telephone, citing growing demand for high-priced products from its apparel brand customers.
The firm’s gross margin was 26.8 percent in the first quarter, up from 26.7 percent in the previous year, a filing with the Taiwan Stock Exchange showed.
Lo declined to disclose possible sites of the new plant, saying that a board meeting to discuss the details of the project would be held soon.
Eclat runs three fabric plants in Miaoli County’s Houlong Township (後龍), one in Taoyuan’s Tayuan District (大園) and one in Vietnam, corporate data showed.
Headquartered in New Taipei City, the firm produces 2,600 tonnes of fabrics per month, its data showed.
It is trying to raise production capacity at its two Vietnamese plants this quarter, which it said would help boost its total production capacity to 7.5 million units of garments per month from the current level of 6.2 million units.
In the first six months of the year, the firm’s revenue totaled NT$11.09 billion, a 2.9 percent decrease from the same period last year.
Sales performance should improve significantly in the second half of this year, as the inventories of its major sportswear customers — including Nike Inc, Under Armour Inc and Adidas AG — are back to normal levels, Daiwa Capital Markets Inc analyst Helen Chien (簡君穎) said in a report on July 10.
Chien also expects the firm to benefit from new orders from e-commerce operators this quarter, such as Amazon.com Inc, according to the Daiwa report.
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