Feng Tay kicks off leisure-shoe production

Taipei, Sept. 23, 2004 (CENS)--Feng Tay Enterprise Co., Ltd., one of Taiwan's leading makers of sports shoes, recently began production of leisure shoes at a Vietnamese factory, marking a prominent step of the firm's strategy of diversifying business into other kinds of shoes.

The Taiwanese shoemaker is currently Nike's second-largest contract supplier. For a long time, the company had made only sports shoes in Vietnam. It began leisure-shoe production in mainland China, where the company runs six production lines for the shoes and 37 lines for sports shoes.

The shoemaker's executives noted that the company would expand output at the Vietnamese leisure-shoe factory, which is now mostly making Clarks and Rockport shoes. The Vietnamese factory's two running lines now turns out 70,000 pairs a month. Feng Tay plans to equip the factory with six to eight lines by the end of next year. In addition, the company plans to expand output at its Vietnamese sports-shoe factory.

With expansion plans, Feng Tay expected its output in Vietnam to exceed those in mainland China.

The company said it had no plan to expand output at the mainland's leisure-shoe factories and sports-shoe facilities.

Feng Tay's Nike shoes from its Vietnamese factories are sold at an average unit price of US$13, lower than the prices of its shoes from mainland Chinese factories but far higher than the minimum 5.7-euro (US$4.7 at US$1:1.2 euro) baseline set by the Europe Union on mainland China-made shoes as a protective measure. So, the company's executives said the company has not felt pressure of raising prices on its shoes.

Thanks to thriving business, the company reported after-tax earnings of NT$1.79 per share in the first half of the year, a 19.3% gain from the comparable period of last year. The company projected shipment of Nike shoes from its factories to rise around 10% this year, to 36 million pairs, from last year.

Feng Tay executives stressed that Nike unlikely lowers outsourcing from their company as it has filled 16% of Nike's contracted shoes.