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Taiwans’s Eclat Textile to close down China unit in Wuxi

Eclat Textile, Taiwan’s largest technology-based textile company, professional functional and flexible knitwear fabric producer and apparel manufacturer is completely closing down its Chinese manufacturing base in the city of Wuxi. The company cited deteriorating investment conditions and surging wages as a cause for this move.

Roger Lo, Eclat's VP, says in the last three years, their Chinese site continued to lose money and that is the reason they don't see any way to turn that situation around in the future. The most challenging aspects of doing business in China have been not only rising wages but also the difficulty of finding employees who would want to work in a garment factory under the nation's previous one-child policy. The Taiwanese company has been gradually scaling down the Chinese factory's capacity this year. The Wuxi facility once accounted for about 5 per cent of Eclat's monthly output but now produces only 1.8 per cent of the 6.2 million clothes the company churns out.

Meanwhile, Eclat aims to continue building its presence in Vietnam where it plans to add two new facilities in the first and third quarters of 2017 with a combined capacity for 1.3 million more garments. Nearly 70 per cent of the company's clothes production and half of its fabrics output have been coming from the Southeast Asian nation. Eclat is not the only Taiwanese company looking to make a move out of China. Pou Chen, the world's largest shoemaker and a supplier to brands including Nike and Adidas, is also boosting its output in Southeast Asian countries to reduce its reliance on China.