The Hong Kong-listed footwear manufacturer is expected to move more of its manufacturing from China to other Southeast Asia countries as a consequence of the U.S.-China trade conflict, reports ILM.
The company’s Chairman, Chu Chin Lu, said in the management review of the Group’s half-year results that the U.S. governments’ plans to implement a 10% tariff on US$300 billion of exports from China, which will include footwear, could further accelerate the pace of capacity migration to Southeast Asia.
“The group will continue to migrate its manufacturing capacity from the PRC to Southeast Asia, while being mindful of the labour supply situation in countries where we operate, especially in Vietnam,” said Lu, who also raised concerns about the continued uncertainty surrounding both the U.S. and China’s future trade policies and the impact on consumer sentiment.
Vietnam accounted for 45% of Yue Yuen’s shipments in the first half of this year, Indonesia for 38% and mainland China for 13%. The Group’s manufacturing business produced 163.2 million pairs of shoes in the six months to June 30, an increase of 2.7% year on year. The average selling price per pair was US$16.49, up by 2.2%. Sales through the company’s listed subsidiary Pou Sheng increased by 12.3%, while in RMB terms (Pou Sheng’s reporting currency), revenue during the first half increased by 19.4%.
Yue Yuen reported Group revenue to US$5.07 billion for the half year, up by 6.3%, with profit up by 10.5% to US$165.9 million. Non-recurring profit was boosted by US$19.1 million from the disposal of Texas Clothing Holding Corp.