Hong Kong-based Li & Fung, the world's biggest textile sourcing group, looks well on its way to reach target sales of $10bn next year, announcing full year 2006 sales up 22% to HK$68bn (US$8.7bn).

The rise in turnover came mostly from organic growth in the mid-teens with acquisitions made during the year, particularly the earlier ones like the Oxford Womenswear Group and the Rosetti handbag business, contributing the rest.

Bruce Rockowitz, president of Li & Fung (Trading) Limited, said that the group had seen demand for more value-added services along the supply chain, "particularly in design and product development services as well as our increasing involvement in replenishment orders".

"We are also benefiting from the growth and success of some of our key customers who have consolidated their buying and are outsourcing more to the group."

Net profit, rising by 23% over the year to HK$2.2bn, was lower than analysts' estimates however, largely due to heavier than expected internal restructuring costs.

But with recent acquisitions of the KarstadtQuelle and Tommy Hilfiger sourcing operations, profits are set for a major boost in the coming year.

"Net profit is expected to grow by 36% as margins remain steady - hardly a shabby performance," says Merrill Lynch analyst Denise Chai.

By Dominique Patton.