Magni-Tech to build fifth Vietnam factory

By New Straits Times

MAGNI-Tech Industries Bhd is expanding its presence in Vietnam this year through the addition of a fifth factory for its garment-making activities.

The Penang-based company which last November acquired garment-maker South Island Garment Sdn Bhd (SIG) for RM42 million, is looking to invest US$1.5 million (RM5.02 million) for its sportwear-making facility in Vinhlong, south of Ho Chi Minh City, its chairman Tan Sri Tan Kok Ping said.

"We already have three factories in Vinhlong, where production costs are lower and there is an abundance in labour," he said after Magni-Tech's annual shareholders' meeting in Penang.

Also present was the company's managing director Tan Poay Seng.

Tan said besides expanding its garment business in Vietnam, where Magni-Tech has presence for over a decade, the company is also mulling over venturing into property development in the country.

"We are carrying out feasibility studies on a proposed location and local joint-venture partner," Tan said, adding that Ho Chi Minh City would be a likely location for the residential project which may cater to middle-class buyers.

Tan Poay Seng said SIG's has 4,500 employees in Vietnam and this figure will increase by 1,000 by December when the new factory which will occupy a one-hectare plot begins operation.

"Our customers are made up of international sportswear companies and the US makes up 50 per cent of our export market while 40 per cent of it heads for Europe and Asia Pacific, the balance 10 per cent."

For its 2007 fiscal year ending April 30, Magni-Tech reported a turnover and profit before tax of RM201 million and RM5.85 million respectively, compared with RM93 million and RM1.28 million respectively during the previous financial year. The hefty increases in turnover and profit for this financial year were mainly due to the contribution from SIG.

At yesterday's meeting, shareholders approved a first and final dividend of five per cent.