Casual, sports, and children's apparel manufacturer Prolexus Bhd is to open its first Chinese factory next year in a bid to cut production costs.

"We want to ensure that when the World Trade Organisation (WTO) agreements are implemented in 2005, Prolexus will be on stronger footing to face the challenges of globalisation,'' chairman Ahmad Mustapha Ghazali told Star Business on Thursday.

The group currently has manufacturing facilities in Penang and Johor as well as Bangladesh and makes apparel under contract for Nike, Fila, Osh-Kosh, GAP, and C&A. It also produces its own range of children's apparel under the brand name Biz-Kids.

Mustapha said the group's existing orders would fully utilise its current production capacity until March 2003.

He added that this revenue should make a positive contribution to group earnings for the financial year ending 30 July 2003. Last year's group turnover dropped 7 per cent to RM157.3 million from RM169.1 million. Profit before tax was down 33.4 per cent to RM5.2 million from RM7.8 million.