When completed three years later, the output expansion will enable the factory to sharply boost its contribution rate to the company`s combined revenue to 20-25% from current 5%. Considering the fact that the average labor cost in Vietnam is only 30% of that in China, institutional investors hence opine that the investment will also help to improve the company’s profits.
Advanced International’s directors confirmed that the hike of labor wage in China, which is estimated to gain 13% yearly this year to further increase the payroll burden on the company’s factory in Dongguan, southeastern China, is actually among the main reasons behind the board’s decision on the output expansion plan.
Accordingly, the investment will be partly designed to improve existing production lines at the Vietnam factory, and partly to move part of the Dongguan factory’s production equipment there. Hopefully, this will drive up the Vietnam factory’s annual output of golf clubs from one million units to 3-4 million units in the three years.
The company scored combined revenue of NT$10.575 billion in 2011, down 11.45% from a year earlier. However, buoyed by strong customer demands, the company’s combined monthly revenue for January surged for the fifth consecutive month by 10.3% year-on-year to NT$1.24 billion, obviously impervious to seasonal recessions.