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Taiwan's Eclat Textile to catch up after restrictions end in Vietnam

18 Aug '21

2 min read

Pic: Eclat Textile

Taiwanese fibre and apparel manufacturer Eclat Textile is planning to outsource capacity and arrange overtime for workers to catch up on delayed orders once COVID-19 restrictions in Vietnam ease next month and its plants there resume normal operations.

The restrictions are likely to affect Eclat’s garment sales by $35.89 million to $43.07 million, and fabric sales by $4.66 million to $5.38 million.

Earnings in the third quarter will likely be dragged by a pandemic resurgence in southern Vietnam, with production disruptions being a near-term risk, Yuanta Securities Investment Consulting Co said in a note last week after Eclat’s annual general meeting.

Vietnam is a key production base for Eclat, with up to 80 per cent of the company’s garment capacity and 30 per cent of its fabrics capacity in that country. The company also has operations in Taiwan and Cambodia.

Amid Vietnam’s worst COVID-19 outbreak since the pandemic began in late 2019, Eclat partially halted its operations in Dong Nai and Ba Ria-Vung Tau provinces in mid-July this year, a Taiwanese newspaper quoted Eclat as saying in said in regulatory filings.

The company told shareholders that it has asked clients about rearranging orders and would add working shifts and increase outsourcing to compensate for clients’ shipment demands, which are expected to boost its revenue in the fourth quarter.

Eclat’s revenue increased by 26.75 per cent year on year to NT$3.46 billion last month, with cumulative revenue for the first seven months of this year rising 51.11 per cent year on year to NT$21.47 billion. Net profit for the second quarter expanded 115 percent year-on-year to NT$1.53 billion.

Fibre2Fashion News Desk (DS)

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