Makalot Industrial Co Ltd (聚陽實業), a manufacturer of ready-to-wear apparel and functional clothing, yesterday said it plans to expand its capacity by about 10 percent year-on-year to better cope with growing orders for athleisure and fast-fashion clothing.
The company said it plans to increase its capital expenditure to NT$430 million (US$13.93 million) this year, compared with NT$391 million last year.
The increased spending would help boost capacity to 15 million dozens this year, compared with 13.7 million dozens last year, Makalot told an investors’ conference.
Makalot has been setting up factories in Southeast Asia and Africa to avoid high tariffs stemming from the US-China trade dispute.
The company expects production capacity at its Vietnamese factories to grow 40 percent year-on-year, while capacity at its Indonesian and Cambodian factories would grow by 32 percent and 20 percent respectively, company data showed.
Investing in Southeast Asia also helps cut costs and makes logistics more efficient, the company said.
The main reason for the increased expenditure is to expand its production lines in Vietnam and Indonesia, leading to the possibility of higher revenue this quarter, said a company employee, who declined to be named.
Wages in Cambodia, Indonesia, Vietnam and China are set to grow between 3 and 8 percent year-on-year, company data showed.
The company’s goal for this year is to improve its customers’ shopping experience, introduce new added-value designs, improve the management of material sourcing and cut its lead time.
Fast-fashion apparel such as ready-to-wear clothing accounted for 73 percent of revenue last year, with the remainder coming from functional sportswear such as athleisure clothing and swimwear, company data showed.
Gap Inc contributed 26 percent of total revenue last year, followed by Japanese brands with 16 percent, Target Corp with 12 percent, Kohl’s Corp with 11 percent and Walmart Inc with 9 percent.
The company posted revenue of NT$6.72 billion for the first quarter, 30.96 percent higher than NT$5.13 billion in the same period last year.
The company said this year’s cash dividend payout ratio would remain at between 70 and 90 percent.
Earnings per share were NT$7.2 last year, an increase of 16.5 percent from NT$6.18 in 2017.
Makalot shares yesterday closed up 1.89 percent at NT$216 in Taipei trading.
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