Kwong Lung Enterprise Co (光隆實業), which makes down and other fillings for textile products on a contract basis, yesterday said its revenue would rise by between 8 and 15 percent next year from this year on the back of higher sales of apparel and home textiles.
Its apparel business, which accounted for 31 percent of its revenue in the past three quarters, is expected to increase by between 15 and 25 percent next year, while sales of home textiles — 22 percent of its revenue in the past three quarters — are likely to rise by between 15 and 30 percent next year.
However, its down business, which accounted for 47 percent of its revenue in the previous three quarters, would remain flat, Kwong Lung said at an investors’ conference.
Chairman and chief executive Herbert Chan (詹賀博) said European outdoor brands Berghaus Ltd and Mammut Sports Group AG would become new apparel clients starting next year, and Kwong Lung recently started supplying apparel and down to Russia-based Sportmaster Ltd, Russia’s largest retail group.
Although most of the firm’s home textiles are shipped to Japan, the depreciation of the yen has had a minor impact on the company, as orders for next year from its clients — including Nitori Co Ltd — are not affected, Chan said.
“Instead, our home textile clients are purchasing more down quilts and related products, as the price of down has decreased,” Chan said.
As for its down business, Chan said many of its clients started diversifying their sources last year, when down costs soared and supply declined because of avian flu.
However, the firm would work to keep revenue unchanged next year on the back of new South Korean clients K2 and Eider, he said.
Chan said Kwong Lung aims to become the No. 2 down supplier in South Korea, with a market share of 30 percent. South-Korea based Pan-Pacific Co leads the market with a 70 percent share.
From January through last month, the company posted revenues of NT$8.06 billion (US$260.92 million), up 1.7 percent from NT$7.92 billion a year ago, significantly missing a 9.8 percent revenue increase estimated by SinoPac Securities Investment Service Co (永豐投顧).
Chan attributed the slow increase to the declining price of down and the company’s Japanese clients failing to increase purchases during relatively warm weather.
Profit for this quarter was expected to remain flat, repeating the NT$45.47 million posted a year ago, while revenue would be lower than the NT$1.92 billion the previous year, Kwong Lung said.
Meanwhile, it plans to spend US$5.2 million next year to build a new apparel factory in Vietnam with 12 production lines, with six of the lines to be operational in the third quarter next year, Chan said.
Chan said the factory is expected to generate sales of between US$12 million and US$15 million a year after all 12 production lines become operational.
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