Ching Feng Home Fashions Co Ltd (慶豐富) plans to transfer 20 percent of its Zhenjiang plant’s capacity for shades and home textiles to its new plants in Taiwan and Vietnam early next year in light of tariffs imposed by the US on China-made products.
The Changhua-based home decor supplier’s decision came as 15 percent tariffs beginning yesterday are to affect its China-made shades and blinds while there is a 15 percent levy on home textiles due in December, Ching Feng special assistant Fang Ming-ching (房明慶) told an investors’ meeting in Taipei on Friday last week.
Ching Feng is constructing a plant at the Changhua Coastal Industrial Park (彰濱工業區) with an annual capacity of 10 million units.
The NT$1.14 billion (US$36.3 million) plant is expected to be completed in the first quarter next year and the company plans to hire 200 workers, Ching Feng chairman Jimmy Hsu (許閔琁) said.
In Vietnam, the company has spent US$13 million on a new plant, which is scheduled to start operations in the first quarter next year, Hsu said.
The two plants would add US$100 million to annual sales, he said.
Ching Feng, which also operates plants in Thailand, reported net income climbed 12.53 percent annually and 65.36 percent quarterly to NT$95.56 million in the second quarter, or earnings per share (EPS) of NT$0.57, as a result of improvement in its product portfolio and economies of scale, Hsu said.
In the first half of the year, cumulative revenue grew 32.45 percent annually to a record NT$2.7 billion, while net income increased 34.11 percent to NT$153.83 million.
The company’s EPS improved from NT$0.75 to a record NT$0.91 in the first half, while gross margin edged up from 18.91 percent to 19.19 percent.
To improve gross margin, the company plans to ship more cordless shades and blinds, which together made up 33 percent of sales in the first half, and less home textiles, such as coral and flannel blankets, which contributed 25 percent, Hsu said.
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