In an ongoing trend that has Chinese mill operators looking to lower production costs, many are relocating operations to less expensive labor markets, namely Vietnam.
More than 15 mills, including publicly traded mills Texhong Textile Group and Bros Eastern Co., have led the migration, citing labor and artificially high domestic cotton prices, according to a Reuters report.
Vietnam is the main destination for relocating mills, and Indonesia, South Korea and even the United States are benefiting from the moves as mechanization, competitive labor costs and tariff forgiveness help woo yarn makers from China.
Hangzhou-based Keer Group is poised to be the first Chinese yarn maker to move to the United States. It is expected to break ground on a $218-million spinning factory in South Carolina in February.
In a related story, majority shareholders of Masood Textile Mills have agreed to sell 52% of its shares through a Share Purchase Agreement with a Chinese group and two other acquirers, according to a notice sent to the Karachi Stock Exchange (KSE) on Monday.
Growing manufacture costs in China, and at the same time greater and greater costs of transportation of products are the reasons of the parallel process of come-back to the European countries, the USA, Japan and Indonesia of the production and services relocated there some time ago.
Polish example of such process is a well known brand – Próchnik – Polish manufacturer of high quality man apparel (overcoats, jerkins, suits, jackets, trousers) since a few decades enjoying a good reputation, which has previously relocated its production to Asia, wants to sew all its clothes in Poland, starting since spring 2014.