Besides, the new company will supply major brands of the jeans world: Zara, Diesel, Miss Sixty, Blue Cult (originating from Tavex) and Levi's (Santista contract). With the increasing value of the Real and the end of the Textile and Clothing Agreement, which imposed a limit to the Asiatic exports, Santista was already feeling a fall on profits, quarter by quarter.
Competitors´ aggressiveness, both with national manufacturers and with the Chinese, has made the denim price fall up to 15%, which made Santista´s gross margin fall from 28.3% in 2002 to 17.1% in 2005.
For a company whose exports represent 40% of the revenue, the Real boom had an even stronger influence. Tavex, the major denim manufacturer in Europe, was not enjoying a good situation either. Since 2002, the revenue and the profit of the Spanish were in decline due to the increase of Asiatic products entering Europe. 'The fusion is a means of survival for the company”, said Eduardo Pfiszter, analyst from Factor brokerage.
One of the first plans that could leave the draft stage is the building of a factory in Asia to serve the growing middle class in the region. Yesterday, on a message to the market, Santista Textile and Tavex have announced the first details of the merger. First, Camargo Corrêa and Alpargatas São Paulo (Santista shareholder and controlled by the group) will transfer the 81.6% they hold at Santista to a new company, Santista España. Then, Tavex will absorb the new company.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
