Interview: Liu Zibin, general manager at Luthai Textile
By Michelle Russell | 23 January 2014
Luthai Textile Co has its sights firmly set on growing its global business
China-based shirt manufacturer and yarn supplier Luthai Textile Co has its sights firmly set on growing its global business. Earlier this month, as the company revealed plans to open an office in New York, Michelle Russell talked to Luthai general manager Liu Zibin about the rationale behind the move.
With customers including Brooks Brothers, PVH and Macy's, the US accounts for 35% of Luthai's total business, making it the group's largest global market. Its decision to open an office in New York City, therefore, appears to be a logical move and, more importantly, a strategic one.
The ShanDong, China-based company currently operates offices in Shanghai, Hong Kong and a design centre in Milan. Adding to this list, the new US office, located in the Garment District at 1450 Broadway and due to open in late spring, will be under the direction of Zibin.
Luthai says the location will place the company in a position to service current clients, respond to new opportunities, and expand relationships with its US customer base.
Already firmly established in the US and with a deep knowledge of the market, Zibin appears confident Luthai has what it takes to build on its success to date.
"In the world, the US is the largest consumer and we feel that there is the most opportunity," he tells just-style. "Since we have a large number of clients in the US, we are looking to enhance customer service, respond to new opportunities, expand relationships, and expand research and development."
A focus on new products, Zibin believes, will also help the company to build its business. "Manufacturing costs continue to rise globally, and retail buyers have become increasingly focused on price. To justify increased pricing, a company must develop innovative products."
Luthai is also looking to expand its business in women's shirts and men's casual shirts.
At present, the firm's product range includes 100% cotton non-iron ladies' blouses, men's non-iron dress shirts, men's organic cotton shirts, and its latest innovation -the seamless shirt - which has proved successful globally.
"Luthai developed the first stitchless shirt which is sold by Hugo Boss in Europe, and Arrow in India. The shirt ensures no wrinkles and is a great opportunity for designers since they don't have to worry about complicated sewing techniques."
Aside from the shirts, the company's core business is the manufacture of textiles, which range from wrinkle-free fabric and functional finishes, to Fenghai cotton (a long-staple cotton developed by Luthai), bamboo and environmentally-friendly fabrics.
A sustainable offering
Zibin suggests the firm's commitment to offering sustainable products is another on-going commitment for Luthai.
"We have been recognised and have won many awards for our [sustainability] efforts. Luthai's organic cotton fabric, bamboo fabric, and other eco-friendly textiles are constantly being researched and developed to meet the market's demands."
Even though the company grows its own cotton - making it a completely vertical operation from the cotton plant right through to the production of garments -Zibin points to global cotton price fluctuations as an unavoidable issue, not only for Luthai, but for all companies operating across the textile industry.
"The level of cotton prices affects us as a manufacturing enterprise, but this risk is unavoidable. The key is whether you can sell your product at a corresponding value. This is how you use product to offset risk."
Luthai has its own cotton field in Xinjiang, an autonomous region in the north west of China, and most of its manufacturing is also done in the country.
This has proved a distinct advantage to the Shandong-based company, as Zibin explains. "Having our own cotton fields helps to improve supply chain coordination, reduce logistics costs, but most importantly it gives the company control over raw material resources, the key factor of production in the garment supply chain."
With an annual output of 178m metres of yarn-dyed fabric, 80m metres of piece-dyed fabric and more than 20m shirts, most manufacturing currently takes place in China.
But the company has also recently opened a garment factory in Cambodia that is expected to be running test orders by the end of this year.
The company has not released figures for its last financial year but Zibin offers a confident and succinct overview of its earnings expectations for its new financial year.
"Luthai's anticipated business income is approximately US$1.3bn. We expect continued growth over the next 12 months."
At the present time, Europe is the firm's second largest market, accounting for 30% of its business, followed by Japan at 20%, Korea at 5%, and mainland China also at 5%.
Whether this is likely to change significantly over the next five years or so is in the hands of Luthai, its customers and of course the consumer.
Nonetheless, the company certainly believes it has what it takes to eke out further success globally, with an offering that Zibin believes sets it apart from its competitors. "In addition to Luthai's size, we are known for outstanding service, a high quality product, and wide range of application know how."
As a company with a presence at each stage of the supply chain, add to that a substantial amount of ambition and a clear strategy, and there is no reason why Luthai shouldn't achieve the success it desires.
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Interview: Liu Zibin, general manager at Luthai Textile