Prolexus to set up two joint-venture plants with Taiwanese firm

KUALA LUMPUR: Apparel maker Prolexus Bhd plans to expand upstream by setting up a fabric mill in a joint-venture with Taiwanese fabric manufactuter Men-Chuen Fibre Industry Co Ltd (MC).

Prolexus, which has three plants in Malaysia and China, told Bursa Malaysia that it also aimed to establish a joint-venture garment manufacturing plant in Vietnam with MC’s unit Men-Chuen Vietnam Co Ltd, which has a knitted fabrics operations there.

Prolexus and MC - a well-established knitted fabric mill involved in knitting and dyeing with operations in Taiwan and Vietnam - signed a memorandum of understanding (MoU) on Friday to form a strategic partnership.

Prolexus, through its subsidiary Trans Pacific Textile (M) Sdn Bhd (TPT), will operate the fabric mill, whose location is not mentioned in the announcement. 

MC will subscribe for an amount to be agreed on in TPT’s issued and paid-up share capital and provide its expertise.

Men-Chuen Vietnam, meanwhile, will invest in the proposed garment plant fin Vietnam for an amount to be mutually agreed on. In turn, Prolexus will invest a similar stake in Men-Chuen Vietnam.

Prolexus said an agreement containing all the mutually-agreed terms and conditions would be executed within six months. 
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Prolexus’ revenue comes mostly from the export market, with the United States (59%) and Europe (19%) being the biggest revenue contributors in the last financial year ended July 31, 2015.

Prolexus shares closed unchanged at RM2.18 on Friday, with 78,800 shares changing hands.