Luthai Textile Co. Ltd., a global leader in the field of specially yarn dyed fabric with strong business relationships, is intending to invest US$ 8 million to set up a wholly-owned subsidiary Luthai (Cambodia) Co. Ltd., in Cambodia.
The Cambodia unit would be mainly engaged in garment processing business and would have annual capacity to produce 3 million shirts, reports tnc.com.cn.
The Chinese firm intends to take advantage of lower labour cost in Cambodia, and thereby reduce garment production costs and improve the company’s competitiveness in the international market.
The setting up of a garment factory in Cambodia would have a significant impact on the company’s profitability and international competitiveness as garment processing fees in labour costs account for more than 80 percent of the total production cost.
Luthai Textile Co. Ltd. is known as the largest high grade yarn dyed fabric producer in China, whose production lines include cotton planting, spinning, dyeing, weaving, finishing and shirts sewing at one point.
About 35 percent of Luthai’s exports are destined to the US, while Europe, Japan and Korea consume 30 percent, 20 percent and 5 percent of Luthai’s products, respectively. Mainland China and other countries account for about 5 percent each.