Denim textile and jeans are Nien Hsing’s two largest revenue contributors. Now in order to tap into the knitwear market, the company is opening a plant in South Africa. The unit will begin production by the middle of next year. The plant will have a capacity of 4,80,000 knitwear units. Taiwan based garment maker Nien Hsing Textile is looking to reduce its reliance on denim-related products and secure more orders from its existing brand customers in the US, who generate more than 80 per cent of Nien Hsing’s total revenue.

Nien Hsing has a monthly capacity of 4.4 million yards of denim textile and 1.8 million units of jeans. In the July-to- September quarter, the company’s net profit fell 51.9 per cent from a year earlier. Sales over the period slid 33.6 per cent, with gross margin falling from 11.9 per cent to 7.05 per cent. The company blamed last quarter’s sluggish performance to soaring cotton prices. Global cotton prices have risen by nearly 30 per cent so far this year, and cotton takes up more than 30 per cent of Nien Hsing’s total production costs. However, the company is relatively positive about its business outlook for the coming quarters, as cotton prices are expected to return to normal levels.