Amidst a difficult operating environment in China, leading Hong Kong garment manufacturer, Yangtzekiang Garment Ltd or the YGM Group witnessed a dip in revenue in the first half of the current financial year 2013-14.
The manufacturer of garments and textiles, Yangtzekiang Garment reported a nearly 17 per cent dip in sales at HK$ 511.8 million in the six months ended 30 September 2013 from HK$ 616 million in the same period a year ago.
The company’s core garments business witnessed a significant drop in revenue at HK$ 508 million in the first half of FY 2013-14 from HK$ 612.5 million in the same period a year ago.
Dragged lower by a dip in turnover, the company’s core garments business swung to a loss of HK$ 5.5 million in the six months ended 30 September 2013.
The company attributed the weak profitability of its core garments business to its tough manufacturing operation in China.
However, the company has managed to reduce its manufacturing costs in China amidst the shift in its main production base to Guigang since two years ago, while the YGM Group is also optimistic that the merger of two factories in Panyu, China will also improve its factory operations in the country.
The company posted an overall profit of HK$ 12.1 million in the six months ended 30 September 2013, compared to a loss of HK$ 17.9 million in the same period a year ago amid the sharp increase in profit from the group’s Wuxi operation due to higher yarn prices and fabric sales.
Going forward, the YGM Group expects the second half of the fiscal to remain challenging especially with a difficult business environment surrounding its core garments business. The company is eying production bases in low cost countries for its garment manufacturing business.