Polyester and cotton textile supplier Tainan Spinning Co (台南紡織) is eyeing other sources of earnings, especially property development, as the company’s core business slows, vice chairman Hou Po-ming (侯博明) said yesterday in Greater Tainan.
The company is working on a NT$30 billion (US$1 billion) three-stage development project in the eastern part of Greater Tainan, with the first stage of development expected to be completed by the end of this year and all three phases by 2021, Hou told the company’s annual shareholders’ meeting yesterday.
The NT$10 billion first stage — office buildings, a hotel and the T.S. Dream Mall (南紡夢時代購物中心) — is being undertaken by T.S. Retail and Distribution Co (南紡流通事業), said Hou, also president of the joint venture between Tainan Spinning and Tungcheng Development Corp (統正開發), a subsidiary of Uni-President Enterprises Corp (統一企業).
Hou said the mall would generate revenue of NT$5 billion to NT$6 billion a year and become profitable the year after its completion.
The second stage is to start in 2016 and finish by the end of 2018, Hou said, adding that the company plans to build apartments, hotels and boutique shops on nearby land.
The third stage is due to begin in 2019 and be completed by 2021, with the company building a residential area and a business area, he said.
“We will sell apartments to acquire the necessary funds to carry on the project,” Hou said, adding that the total value of the land and buildings in the project would reach NT$60 billion by 2021.
As for the company’s core textile business, Hou said the firm’s capacity for spinning would increase by 40,000 spindles a year starting in the middle of next month and by another 40,000 spindles a year in January next year after its expansion work in Vietnam is completed.
The company’s capacity for making cotton yarn will rise to 600,000 spindles a year in Vietnam and 170,000 spindles in Taiwan starting in January next year, he said.
However, Hou said the company’s profit in the first half of this year might not be as high as a year ago because of oversupply in China.
Last quarter, the company posted a profit decline of 64.3 percent to NT$119.49 million, or earnings per share of NT$0.07, down from NT$334.74 million, or earning per share of NT$0.21, the previous year.
From January through last month, the company’s revenue dropped 9.65 percent to NT$8.1 billion, from NT$8.96 billion the previous year.
Separately, cross-town peer Everest Textile Co (宏遠興業), which makes fabrics and garments, yesterday said Canada-based yoga wear giant Lululemon Athletica Inc has increased its purchases from the company.
Douglas Hsu (徐旭東), chairman of Far Eastern Group (遠東集團), which has a 46.48 percent stake in Everest Textile, said at the company’s annual shareholders’ meeting yesterday that a higher share price showed shareholders’ confidence in the firm’s management team.
Everest Textile closed at NT$17.5 yesterday, about double the price a year ago.
“It is a great accomplishment for Everest to work with top apparel makers around the world and make popular functional clothes,” Hsu said.
Although the company’s revenue increased by only 4 percent last year to NT$7.64 billion from NT$7.38 billion a year earlier, Everest Textile’s operating profit grew 1.41 times to NT$213.65 million from NT$88.56 million the previous year.
“We decided to increase the production of knitted fabrics, as we see a growing demand around the world,” company president Roger Yeh (葉清來) said. “In an exhibition of our apparel products last month, a third of our products were made of knitted fabrics and the latest yarn dye technology we developed was applied to half of our knitted fabric products in the exhibition,” Yeh said.
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