Nonwoven fabrics maker Nan Liu Enterprise Co (南六) yesterday said that its output and sales would climb in the second half of this year as the utilization rate at its new plant in Kaohsiung’s Yanchao District (燕巢) improves.
The plant, which has a maximum output of cotton spunlace nonwoven fabrics of 2,000 tonnes per month, started operations in January.
The utilization rate is expected to rise to 30 percent in the third quarter and 70 percent in the fourth quarter, the company said at an investors’ conference.
“The increase in output is to meet growing demand from our clients, both old and new, and also for our own use,” Nan Liu finance department manager Chuang Chun-chin (莊春金) said, adding that the firm has order visibility of about one year.
Spunlace nonwoven fabrics contributed 30.2 percent of Nan Liu’s total revenue last quarter, compared with 40 percent for wet wipes and facial masks.
Air-through and thermal-bonded nonwoven fabrics, used for making diapers, contributed 27.1 percent to overall revenue in the first quarter, while fabrics for surgical gowns was 12.6 percent, company data showed.
The company said that its factory in Ahmedabad, India, would be completed early next year and begin production of air-through and thermal-bonded nonwoven fabrics.
It is expected to begin contributing to sales in the middle of 2021, it said.
“The reason we chose India is because we can get closer to our major clients’ plants and also focus on its promising market for cleaning products as the nation’s population grows,” Nan Liu independent director Peter Huang (黃俊評) said, adding that the company has invested US$20 million in the region.
Asia remains the largest market for Nan Liu, with Taiwan last quarter contributing 17.8 percent in sales, Japan 15.2 percent and China 44.8, it said.
The company expects improved sales contribution from its Chinese plant in Pinghu, Zhejiang Province, this quarter on rising e-commerce sales and increased shipments of higher-margin products, such as fabrics for surgical gowns, from next month, it said.
In the first quarter, Nan Liu reported that net income climbed 15.42 percent to NT$114.71 million (US$3.63 million), from NT$99.38 million a year earlier, while earnings per share increased to NT$1.58 from NT$1.37.
Gross margin fell by 0.13 percentage points to 16.78 percent, dragged by increased sales of low-margin spunlace nonwoven fabrics.
The company said that it expects gross margin to remain between 18 and 21 percent this year as the Yanchao plant ramps up production.
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