Tai Yuen Textile Co, a core affiliate of the Yulon Group, plans to establish an integrated knitted fabric factory in Mexico, with the NAFTA (the North American Free Trade Agreement) area to be the target market

With planned investment of NT$500m to NT$1bn, the integrated factory will spin, weave, dye, and finish the yarn fabric. The factory will have an annual spinning capacity of 1.2 million kilograms of yarn and a dying/finishing capacity of 3.6 million kilograms, generating estimated revenue of NT$1.5bn-NT$2bn a year.

The company expects Gap, Polo, and Tommy Hilfiger to be the main clients for its knitted fabric.

Tai Yuen is currently evaluating three possible locations for the factory with proximity to the Gulf of Mexico as the top priority. It is also negotiating investment incentives with the Mexican government.

The company hopes to decide on the site at the end of the year and to begin construction early next year. If all goes to plan, the factory will start operations at the end of 2002.