Spandex group owner reaps rewards of locating in Vietnam
30/08/2013
Hong Tianzhu established the company – shares of which have soared 445% in the past 12 months – in 1997 and now owns 11 plants in China and four in Vietnam.
Textile makers in China, the world’s largest cotton user and importer, have been “gravely hurt” by the government’s policy to purchase domestic cotton to shield local farmers from slumping prices caused by a global oversupply, according to the China National Textile & Apparel Council. The policy led to a two-tier market where China’s cotton prices are about 75% higher than in Vietnam.
Texhong specialises in spandex, used in sports apparel and underwear, and benefits from lower labour costs in Southeast Asia.
Texhong’s profit tripled to $73 million in the first half of this year with revenue up 8.5% to $588.2 million.
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