Yue Yuen, Formosa Taffeta invest in sportswear business

Taipei, May 21, 2003 (CENS)--Yue Yuen Industrial (Holdings) Ltd., an arm of Pou Chen Industrial Corp., and Formosa Taffeta Corp., an affiliate of the Formosa Plastics Group, plan to invest in Quang Viet Enterprise Co., a profitable sportswear manufacturer.

Both Yue Yuen and Formosa Taffeta see great potential for Quang Viet to develop its sportswear and casual clothes businesses.

Headquartered in Taiwan, Quang Viet currently has two production facilities in mainland China and Vietnam with annual sales revenues amounting to NT$1 billion (US$28.9 million at US$1:NT$34.6) last year. The company plans to convene a general shareholders meeting on June 22.


Listed on the Hong Kong Stock Exchange, Yue Yuen is the world's largest manufacturer of sport shoes and casual shoes, with a 16% share of the global sport-shoe market. Over the past several years, Pou Chen has been expanding into the production of sportswear and sports accessories through Yue Yuen.

Yue Yuen produced 30.9 million pair of shoes in the fourth quarter of last year, up 25.2% from the same period of 2001. Revenue from sport shoes accounted for 75.6% of the company's total turnover in the fourth quarter of last year, while casual shoes accounted for 17.4%, shoe materials 6.2%, and distribution services 0.8%.

With production facilities in mainland and Viet Nam, Formosa Taffeta is a world-leading manufacturer of taffeta fabrics. The company currently has a more than 10% stake in Quang Viet and hopes to increase the ratio to over 30%.

Yue Yuen said its investment in Quang Viet will help it increase sales of fabrics.

Wu Chao-pi, president of Quang Viet, declined to provide information about the Yue Yuen and Formosa Taffeta investment plan.

Wu said his company's plan to issue new shares, to which Yue Yuen and Formosa Taffeta reportedly plan to subscribe, needs to be approved by the board of directors and general shareholders meeting. However, he predicted the share issue could be concluded in the beginning of July.

Originally Quang Viet started as a small Taiwanese producer of garments for export to Europe. Eight years ago, it moved its production facilities to Vietnam and currently has a plant in Ho Chi Minh City with a work force of 5,000. The plant specializes in the production of sportswear for Nike.