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The Chairman of Eclat Textile Hung Cheng-hai (Image credit: Bloomberg)
Nike Supplier Eclat Textile plans to invest in Indonesia, Cambodia after leaving Vietnam
Eclat Textile which is Nike Supplier and the largest clothing company in Taiwan intends to invest in new locations in Southeast Asian countries such as Indonesia or Cambodia after moving out from Vietnam, said Chairman of Eclat Textile, Hung Cheng-hai.The company’s board will decide specific locations later this year, Hung underlined.
The investment is reported will be around $80 million for establishing 120 production lines in the region.
Seeing the global circumstances right now, diversification becomes one of the corporation’s reasons. Currently, the company claims if Eclat Textile is not diversified enough. According to Chairman Huang, half of its garments are made in Vietnam, while the company’s clients ask for risks diversification and don’t want to depend on just a single country for the production center.
As the global trade dispute escalates, Eclat Textile realizes that the company is at risk if it has to stay in Vietnam and need to go out of the country.
Previously, the U.S leader Donald Trump labeled Vietnam as “the single worst abuser of everybody”. The U.S government viewed that Vietnam took advantages amid the trade war even worse than China. On early July 2019, it was reported tax on steel imports from Vietnam was charged for more than 400 by the U.S. Commerce Department.
Since the trade war between China and the U.S began, many companies switched their manufactures from China to other countries, such as Vietnam, Bangladesh, and Taiwan.
According to Japanese investment bank Nomura, Vietnam gained the largest benefits from the ongoing tariff dispute between Washington and Beijing. Taiwan, Chile, Malaysia, and Argentina also received advantages from the trade war, Nomura added.
If Eclat Textile is really moving out from Vietnam later, it will be the second time for the company after its leaving from China in 2016. Three years ago, the company decided to completely leave China because its investment situations deteriorated and employees’ wages surged.
Source: https://www.bloomberg.com/news/articles/2019-07-14/nike-supplier-pivots-away-from-vietnam-after-exiting-china
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