TAIWAN: Textile Manufacturers Cash In On Low-Cost Vietnam
Three manufacturers listed on the Taiwan Stock Exchange (TSE) - Hualon Corp, Chung Shing Textile Co, Ltd, Tainan Spinning Co, Ltd - and one listed on the Taisdaq - Lien Ming Textile Co, Ltd - have profited from their Vietnamese operations, the Taiwan Economic News reported today.Vietnam's low cost labour and land, plus preferential quotas and tariffs for exports to the US, have attracted investment by a number of textile manufacturers from Taiwan, now a major source of foreign investment in Vietnam.Hualon Corp, through its affiliate Hualon Dyeing Corp, established a factory covering 3.6 million sq. ft or 100,000 pings (1 ping=36 sq. ft.), in Vietnam three years ago. The factory makes knitted fabric and polyester textured yarn. It began to show a profit just over a year ago, and is expected to bring after-tax profit of US$3m for Hualon this year. The labour cost in Vietnam is only one-twentieth the level in Taiwan, a company spokesman pointed out.Chung Shing set up two subsidiaries in Vietnam - one spinning up to 30,000 spindles of yarn a month and the other for fabric knitting. The Vietnam concerns are making more money than the company's other factories in China and Honduras.Lien Ming produces various kinds of blended yarn in Vietnam, with a monthly capacity of 20,000 spindles. The company plans to gradually shift its main production base from Taiwan to Vietnam. Lien Ming will move a whole set of yarn-spinning equipment from its domestic factory to Vietnam by the end of this year. As a result, the company's monthly spinning capacity in Vietnam will rise to 60,000 spindles.Tainan Spinning augmented its production capacity of yarn in Vietnam to a monthly level of 80,000 spindles with additional investment of NT$500m last year. The company further expanded the yarn spinning capacity by 20,000 spindles to a total of 100,000 spindles a month this year.
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