Vicunha Textil, which makes jeans for brands such as Levis and Zara, is negotiating buying a textiles factory in Argentina and investing as much as US$25m to expand its Ecuadorian manufacturing facilities.
“We want to consolidate our South American lead and strategic presence in Latin America to better serve the US and European market,” a company official confirmed to just-style.
Vicunha made a second big acquisition in Ecuador last month when it bought rival Textilia for an undisclosed amount. In 2008, the firm snapped up La Internacional, billed then as Ecuador’s largest textiles company, churning out 12m square metres of denim fabric a year.
Vicunha hopes to double Textilia’s production to 24m square metres of fabric per year from April 2011. The site will supply the European market where Ecuadorian products can enter through preferential duties, the official said, adding that the company’s Brazilian products don’t benefit from that regulation.
The additional output will also be sold to Mexico, where Vicunha plans to set up a distribution centre to target the US market. Regarding Argentina, the official said Vicunha is analysing “several targets” and that it hopes to make a purchase “very soon”.
“We already have a significant presence in Argentina where we sell our Brazilian products,” he said.
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By GlobalDataLike the Ecuadorian investment, the Argentine expansion will help Vicunha save production costs and gain operational efficiencies.
Vicunha makes Indigo and Twill denim fabric and jeans for large Brazilian and International customers including Levis, Zara, DKNY and Diesel to name a few. The company makes 40% of Brazil’s Indigo denim fabric.
