Outdoor footwear supplier Fulgent Sun Group (鈺齊國際) yesterday said it expects production capacity to grow between 10 percent and 15 percent annually this year through ongoing expansion projects in Cambodia and Vietnam.
“We are planning to raise the production capacity of our existing plants in both countries in a bid to satisfy customers’ demand,” Fulgent Sun spokesman Sunny Liao (廖志誠) told an investors’ conference in Taipei.
Headquartered in Yunlin County, the shoemaker has six overseas production bases: three in China, two in Vietnam and one in Cambodia.
Company data showed that the plants in China contributed more than 50 percent of its overall capacity last year.
“To reduce operational risks, we hope to cut the capacity contribution [of the China-based plants] to 40 percent this year,” Liao said.
The company is set to finish construction of five new production lines at its Cambodian plant in the second quarter, while three lines at its Vietnamese plants are under construction and scheduled to start production next year.
The company plans to invest about NT$500 million (US$16.53 million) on capital expenditure this year for ongoing capacity expansion, Liao said.
The company said it has also been working to improve sales contribution from its Gore-Tex certified products, which have higher selling prices and gross margins compared with its other sports footwear.
Revenue from Gore-Tex footwear accounted for more than 40 percent of the company’s total sales last year, compared with 36.6 percent in 2015, data showed.
Last year, the company’s consolidated sales rose 0.4 percent year-on-year to NT$9.08 billion, while net income skyrocketed 509 percent to NT$702.3 million, or earnings per share of NT$5.23, compared with the NT$115.4 million, or NT$0.88 per share, in the previous year.
The company attributed the surge to a better product portfolio and more effective control of its manufacturing.
Its gross margin was 18 percent last year, compared with 13 percent in 2015, while its average selling price also improved from US$24.2 to US$28 last year, company data showed.
Based on last year’s earnings, the company has proposed distributing a record-high cash dividend of NT$3.3 per share, which represents a payout ratio of 63 percent.
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