Intimate apparel maker Top Form International Ltd on Friday warned it expects sluggish sales in the second half of 2003 due to the war in Iraq and Severe Acute Respiratory Syndrome (SARS) outbreak.

The company said it currently has orders worth $35 million but excepts demand to weaken after July due to the military conflict in the Gulf and the possible spread of the deadly flu bug.

It added its new plant in China’s Jiangsu province will open next year and boost annual production to 60 million pieces from the current 52 million pieces.