Paiho’s new Vietnam plant ready to go

HOLDING FAST::The shoelace and fastener maker expects to see an increase in orders ahead of the Tokyo Olympics as major customers release new shoe designs

By Kwan Shin-han  /  Staff reporter

Wed, Jul 17, 2019 - Page 12

Taiwan Paiho Ltd (台灣百和) yesterday said its new factory in Vietnam would start mass production next month, which is expected to raise its Vietnamese output by 20 percent later this year.

“Production lines at our factory in the Le Minh Xuan 3 Industrial Park recently started pilot runs and are to begin mass production next month to meet growing demand in the region,” a Paiho public relations official, who declined to be named, said by telephone.

“We expect the second half of the year to outpace the first half as the Tokyo Olympics draw near, and orders for shoelaces are likely to grow as our clients release new shoe designs,” she said.

In the first half of the year, net profit attributable to the parent company, which makes shoelaces, touch fasteners and elastics for shoes and clothes, climbed 16.81 percent year-on-year to NT$798.26 million (US$25.72 million), Paiho reported last week.

Earnings per share increased from NT$2.29 a year earlier to NT$2.68, but gross margin decreased 2.13 percentage points to 35.1 percent due to low utilization rates for four-way elastics products, it said.

Revenue rose 34.27 percent to NT$7.91 billion, but would have only increased 12.7 percent if real-estate sales were omitted, it said.

“The increase in sales and profits are due to contribution from our top 10 clients, which climbed 5 percentage points to 63 percent in the first half of the year,” the official said.

The company’s major customers include Adidas AG, Nike Inc, Under Armour Inc, New Balance Athletic Shoe Inc, Reebok International Ltd and Puma AG, analysts said.

Paiho has factories in Taiwan, Vietnam, Indonesia and Dongguan, Wuxi and Jiading in China.

The Indonesian operations turned profitable in January, the company said.

Shoelaces accounted for 54 percent of total sales in the first six months, touch fasteners made up 15.9 percent, elastics contributed 13 percent and molded hooks came in at 9 percent, it said.

The official said new four-way stretchable elastic and woven jacquard fabric products have higher average selling prices and a good margin outlook, although they only accounted for 2 percent of total sales in the first half of the year.

Paiho has been expanding its customer base by reaching out to the aviation and virtual reality sectors, she said.

The company also expects several real-estate development projects and the sale of some parking lots to contribute to sales later this year or in the second quarter of next year, she added.

Paiho shares yesterday closed up 4.11 percent at NT$96.3 in Taipei trading. They have skyrocketed 95.33 percent so far this year.