China’s Anli in July announced a preliminary plan to build a polyurethane leather plant in Binh Duong province, Vietnam.
‘[Vietnam has] convenient transportation and low labor cost with high population density,’ said Anli’s statement. ‘It has become China’s largest export market for synthetic leather.’
‘It is also a highly open market with preferential policies for high-tech sectors such as new materials,’ the statement added.
Located in the province’s Vietnam Singapore Industrial Park, the plant will have nearly 26,000 m2 total area for facilities with 12 million meters/year polyurethane leather capacity, including two dry and two wet production lines.
The plant has $22m investment earmarked and is expected to generate CNY 20m ($3m) annual profit on CNY 360m sales when in operation. Its planned business scope also covers other polyurethane compound materials.
The project will be conducted by joint venture Anli (Vietnam) Freecode Material Technology, which is 60% held by Anli, 25% held by Hong Kong-headquartered shoemaker Huayang International Group Holdings, and 15% held by Freecode (Hong Kong) International Trade.
Freecode is Vietnam’s leading upstream supplier to shoe and apparel manufacturers, in partnership with the world’s top brands such as Nike, Adidas and Puma, said the statement.
According to Anli’s financial forecast, it saw up to CNY 3.3m net loss over the first half of 2017, compared with CNY 33m net profit during the same period in 2016, due to China’s rising raw material and energy prices by up to 50%.
‘[The new plant] will help build our network with international brands’ Vietnam manufacturer sand further facilitates such brands approval of and partnership with our company,’ said the statement.