Tah Tong Textile Co Ltd (大東紡織), which makes yarns and fabrics, yesterday said the company has invested US$12 million to build a factory in the south of Ho Chi Minh City, Vietnam, to increase its capacity of yarn production by 35,000 spindles a year.
The factory will be operational in May next year, the company said, adding that the factory is likely to increase its revenue by 30 percent, Tah Tong deputy spokesman Hsu Ming-yu (許明裕), said by telephone.
The company currently operates two factories in Taiwan with a monthly capacity of 800 tonnes of yarn, with yarn and fabric each accounting for 50 percent of the company’s revenue.
From January through last month, Tah Tong posted revenue of NT$984.94 million (US$33.54 million), down 17.67 percent from NT$1.2 billion the previous year.
In the first half of this year, the company swung to profit of NT$6.24 million, from a NT$8.56 million loss a year ago, company data showed.
“We chose to build the factory in Vietnam because of rising wages in China, the possibility for Vietnam to join the Trans-Pacific Partnership [TPP] and lower tariffs to ship products to other ASEAN countries,” Tah Tong chairman Steven Chen (陳修忠) said.
Chen said the company has cut low-profit margin orders, and instead has offered higher-priced products to selective clients to improve margins.
He expects this year's profit to be higher than last year's NT$8.05 million.