Taiwan's Makalot to invest in Vietnamese textile sector

04 Oct '13

2 min read

Taiwan-based Makalot Industrial Co. is planning to invest US$ 8.99 million in Vietnamese textile sector as a part of its strategy to take advantage of the US’ zero-tariff policy under the Trans-Pacific Partnership (TPP) agreement, expected to be signed later this year.

Makalot would invest US$ 4.49 million to acquire a 50 percent stake in Namtex Co. Ltd, a subsidiary of yarn maker Tainan Spinning Co., and the remaining amount would be used to recapitalize the Vietnamese unit to US$22 million in 2017 from US$11 million this year, Taipei Times reported.

The acquisition of 50 percent shares of Namtex would increase yarn supplies for Makalot’s apparel production, while broadening its production base in Southeast Asia.

Moreover, the vertical integrations would also help the company to benefit from the TPP agreement, of which Vietnam is likely to become a member, Frank Chou, Makalot chairman told newsmen.

The TPP agreement, which is currently in final stages of negotiation, is expected to give zero tariffs to textile and apparel companies on the basis of yarn-forward principle, which means clothing companies would have to produce from yarn till the final apparel only in TPP countries to avail the zero-tariff benefit.

Makalot’s investment will increase Namtex’s capacity from the current 700,000-800,000 kg to 1.1-1.2 million kg by 2015.

Makalot is one of the leading apparel manufacturing companies in Taiwan, which supplies its products to major retailers across the US, Europe, Japan, Taiwan and China.

Fibre2fashion News Desk - India

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