SUNGAI BULOH: Hytex Integrated Bhd expects its US$25mil manufacturing plant in China to produce half a million garments per month when it begins production in November.
The new plant is located in Taichang, about 50km from Shanghai.
Hytex executive chairman Soo Kim Sin said expansion to China, which began in March 2004, was part of the company's plan to grow organically.
“Built on 23 acres, the plant has a built-up area is 300,000 sq ft, which only occupies one-third of the land. There is room for future expansion on the remaining land. The potential in China is big because land is cheap and skilled labour easily available,” he said after the company AGM here yesterday.
Soo added that building the new plant, including land, cost RM40mil, new and existing machinery a further RM40mil and about less than RM20mil would be used as working capital. The new plant will provide integrated manufacturing such as designing, knitting, and dyeing and finishing.
In Malaysia, the group has a sales mix of 50% export market as an original equipment manufacturer and another 50% local retail market as an original design manufacturer and original brand manufacturer.
“We intend to adopt a similar model for the new plant in China,” Soo said.
The group also planned to enter China's retail market through franchise with local companies there.
“We are looking at profit rather than volume,” he added.
Currently, its plants in Malaysia and Cambodia monthly produce 600,000 garments each. It will have a combined monthly production of 1.7 million garments when the new plant is ready.
Hytex subsidiary Hytex Apparel Sdn Bhd director Saw Kim Hock said the group was planning to expand locally by opening more World of Cartoons and World of Babies outlets.
“We plan to add five more World of Babies outlets to our existing 12 outlets. As for World of Cartoons, we plan to add two more outlets to our current 20 outlets. We hope to open the new outlets during the current financial year ending March 31, 2007,” he said.
Saw added that Nike appointed the group to set up a Centre of Excellence two months ago to shorten the lead time in retail.
The group also has other concept stores including American Athletics, Issue and Hytex Studio.
The group's net profit was RM2.1mil on turnover of RM153mil for financial year ended March 31. In the previous financial year, its net profit was RM7mil and turnover RM140.2mil.