Speedo has struck a supply deal with struggling Spanish textiles group Dogi.

The Barcelona-based firm, which posted EUR21.7m (US$33.8m) loss in 2007 after a failed restructuring, has won a contract to supply the swimmwear maker with stretch and nylon fabrics until 2010, the company has announced in a statement.

Dogi said the financial benefits of the agreement will start to show in the second half of 2008.

Dogi will supply the material to speedo from its Asian factories, which it is struggling to expand. Dogi axed 214 jobs and shifted 30% of ouptut to Asia last year to streamline its Spanish operations and concentrate on core products.

Last August, the company said the scheme should help it deliver a EUR800,000 net profit in 2008 from sales of EUR189m.

Apart from Speedo, Dogi makes lingerie and underwear fabrics for apparel giants such as Victoria's Secret and DBA Apparel.

By Ivan Castano Freeman.