Nien Hsing to Transfer Production Base From Nicaragua to Vietnam

Taipei, June 20, 2008 (CENS)--Seeing weakening competitiveness in Central America, Nien Hsing Textile Co., a leading Taiwanese garment maker, is going to move its production base from Nicaragua to Vietnam.

Nien Hsing has had a total of five garment plants and one cloth dyeing plant in Nicaragua. Of its five garment plants there, three generate mainly blue jeans and the related clothes, and the other two produce casual garments. Presently the company has just closed one casual garment plant in the country and will close the other one at the end of this month. Besides, it will further shut down the three blue jean plants by the end of this year and keep only the dyeing plant there.

Nien Hsing will transfer the orders already received by its casual garment plant in Nicaragua to its plants in Cambodia for processing and completely suspend the operations of casual garment in Nicaragua by the end of this year. However, the company will keep its strength in the production of blue jeans since it is now the world's third largest blue jean maker and will move the production lines to Vietnam.

Nien Hsing has already established its first garment plant in northern Vietnam with a monthly production capacity of 40,000 dozens of blue jeans, and its second plant there is expected to be completed in November this year. The company hopes to set up a total of six garment plants in Vietnam before 2010.

A senior company official indicated that the prices of garment have been trending downward since the cancellation of the Multi-Fiber Agreement on global textile quotas in 2005. To reduce manufacturing cost, Nien Hsing has to move its operations from Nicaragua to Vietnam because the labor cost of the former is triple that of the latter. In terms of labor cost, the company's operations in Vietnam can save at least NT$1 billion (US$32.26 million at US$1 = NT$32) a year, in comparison to those in Nicaragua.

Currently Nien Hsing turns out about 80 million pieces of blue jeans and casual trousers per year.