Yue Yuen Industries, the Hong Kong-listed footwear manufacturer, is to move more of its manufacturing out of China and into other Southeast Asian countries, as the US-China trade conflict gives no hints of slowing down.
“The US government’s plans to implement a 10% tariff on US$300 billion of exports from the PRC, which will include footwear, could further accelerate the pace of capacity migration from the PRC to Southeast Asia,” said the company’s chairman, Chu Chin Lu, in the management review of the company’s half-year results.
“The group will continue to migrate its manufacturing capacity from the PRC to Southeast Asia, while being mindful of the labour supply situation in countries where we operate, especially in Vietnam,” said Lu, who is also worried that continued uncertainty surrounding both the US and China’s future trade policies may impact on consumer sentiment.
Yue Yuen reported group revenue to $5.071 billion for the half year, up by 6.3% with profit attributable to shareholders up by 10.5% to US$165.9 million. Non-recurring profit was boosted by $19.1 million from the disposal of Texas Clothing Holding Corp.