Vietnamese garment manufacturer Quang Viet is a down jacket supplier for global sportswear and functional clothing brands including Adidas, North Face and Patagonia. It also produces for luxury brands including Prada. The company operates three plants in Vietnam and two in China, with a total capacity of 8,50,000 units of clothing a month. It now plans to add 30 production lines to its plants in Vietnam next year and aims to expand capacity by 10 per cent each year in the next three years, mainly in Vietnam.
Quang Viet sources raw materials, such as down and feather, from China. However, rising labor costs in Vietnam and declining orders dragged down profitability in the first nine months of the year. Gross margin in the first nine months of the year shrank from 20.4 per cent to 18.9 per cent and revenue decreased four per cent year-on-year.
Despite losses, the company is upbeat about its business outlook in the coming quarters because of robust demand for its high-end down jackets. Sales are expected to grow 10 per cent next year and the company is considering tapping into knitted fabric garment production to drive next year’s revenue.
