Lu Thai Textile To Invest 500M Yuan In Factory

Lu Thai Textile (000726) plans to invest 505 million yuan to build a yarn-dyed fabric factory, reports China Business News, citing the company’s announcement. Once operational, the facility will have production capacity of 40 million meters of fabric annually. The source did not specify where it would be located, however.

Lu Thai Textile raised 950.81 million yuan in 2008 and allocated 200 million yuan to the creation of a sales network. However, the company only invested 19.25 percent of that sum in advertising, opening stores, and online sales over the past three years.

The company has decided to cut investment in the creation of a sales network to 140 million yuan of the remaining funds. This, Lu Thai Textile believes, will optimize its product structure and expand its high-end fabric production capacity.

Zhang Bin, an analyst at Sinolink Securities (600109), said Japanese and European producers of mid-range and high-end yarn-dyed fabric are moving to China. Zhang added that Lu Thai Textile is competitive in this sector.

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