Taiwan Paiho will invest $50 million into a plant in Vietnam to produce jacquard fabrics for shoes, according to news site taipeitimes.com
The plant is scheduled to start operation in the fourth quarter of next year. Taiwan Paiho Ltd. manufactures shoelaces and elastic tape.
The Vietnamese plant would be operated by subsidiary Paiho Shih Holdings Corp. and the plant would produce mainly jacquard warp-knitted fabrics for global customers, the firm said.
Earlier this month, Paiho Shih signed $60 million of syndicated loans with KGI Bank and 13 other lenders for its investments and related business in Vietnam.
Taipeitimes quoted Paiho Shih chairman Cheng Kuo-yen as saying at an investors’ conference on Thursday last week that the company decided to build the new plants in Vietnam instead of another Southeast Asian country after analysing transportation costs and tariffs.
One of Taiwan Paiho’s major customers, Taiwanese footwear manufacturer Pou Chen Corp., also has factories in Vietnam.
Taiwan Paiho said it will install 42 machines at the Vietnamese plant next year and expects to increase that to a total of 350 machines within five years, but did not disclose a capacity target.
In the year to December 15, as recorded by the General Department of Vietnam Customs, Vietnam exported $12.3 billion worth of shoes and $2.99 billion worth of bags and umbrellas. On-year growth was 8 per cent, lower than the earlier expected 10 per cent.
The Vietnam Leather, Footwear and Handbag Association attributed the less-than-desirable result to political instabilities, especially Britain’s exit from the European Union, which caused demand in Europe to decrease, resulting in falling orders from importers.