Garment manufacturer Quang Viet Enterprise Co (廣越) on Friday said it is to acquire a 60 percent stake in Jordan-based Atlanta Garment Manufacturing Co to expand its presence in the Middle East.
The US$2.7 million transaction, which is scheduled to be completed by the end of this year, is to be the Taiwanese company’s first acquisition in the Middle East, Quang Viet said.
Atlanta enjoys a good reputation for its knitwear business and has solid cooperation with several global sportswear brands, Quang Viet president Charles Wu (吳朝筆) said in a statement on Friday, adding that the Jordanian company is expected to generate revenue of between US$15 million and US$20 million next year.
Wu said Quang Viet hopes that the deal will help it to tap into the high-end clothing market in the Middle East and cement its market position in the global garment industry, citing potential zero-tariff benefits brought by Jordan’s free-trade agreement with the US market.
“The transaction was also in line with our long-term business strategy to diversify our product portfolio and reduce the effect of the slow season by lifting the revenue contribution of knitwear products,” a company official said by telephone.
Taipei-headquartered Quang Viet is the world’s second-largest down jacket supplier behind Korea’s Youngone Corp, manufacturing high-end down jackets for global sportswear and functional clothing firms including Nike Inc, Adidas AG and North Face Inc.
Company data show that revenue from down jackets and primaloft jackets makes up nearly 80 percent of the firm’s total sales.
Revenue generated in the first quarter generally makes up only 5 percent of the company’s total sales, while sales in the second and third quarters contribute 25 percent and 50 percent respectively, the data show.
The official, who asked to remain anonymous, said Quang Viet is soon to announce another overseas acquisition related to its knitwear business, but declined to elaborate.
The company posted revenue of NT$1.99 billion (US$65.73 million) for last month, a 6.06 percent increase from NT$1.85 billion the previous year, a company filing with the Taiwan Stock Exchange showed. That brought cumulative revenue for the first three quarters of this year to NT$7.6 billion, representing a 2.74 percent increase from the previous year.
Quang Viet posted a loss of NT$33.29 million in the first half of this year, compared with a net profit of NT$79.96 million for the same period last year, which the company attributed to foreign exchange losses of NT$53 million over the period.
Quang Viet gave an optimistic business outlook for the second half on the back of fewer fluctuations in the foreign exchange market and kept its whole-year sales target of NT$10 billion unchanged, up from last year’s NT$9.04 billion.
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