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Shandong Ruyi has been transforming from a traditional manufacturer into a brand-driven enterprise, strategically integrating overseas resources to strengthen its market position. The company’s listed subsidiary still primarily focuses on worsted wool fabric production, with an output of 7 million meters in 2009. Following expansion plans, the capacity is expected to rise to 10 million meters in 2010 and 15 million meters in 2011. The “Ruyi Spinning†technology drives demand, and as production scales up, cost efficiencies are helping maintain stable pricing. With the increased industrialization of this technology, gross profit margins are projected to reach 27.5% in 2010 and 28% in 2011.
The company is shifting toward terminal markets, focusing on high-end products such as cotton-silk printing textiles, home textiles, and premium wool suits. It leverages resource integration models by combining the design and management strengths of acquired companies in Japan, Italy, and France with its own manufacturing capabilities to tap into both domestic and international markets.
Despite a sluggish export market last year, the domestic market remained strong, reinforcing the company’s commitment to expanding within China. Over the next three to five years, the full textile industry chain will support the growth of its own brands, including “James King,†while improving its retail network.
Since entering the capital market in April 2010, Shandong Ruyi has steadily expanded its production capacity. By 2011, it aims to produce 75 million meters of fabric, 8,000 tons of yarn, and 11.8 million shirts, reducing reliance on outsourcing and increasing gross margins.
The company currently operates an integrated supply chain, covering spinning, weaving, and garment production. Over the past three years, revenue and net profit have grown at compound annual rates of 31.43% and 26.44%, respectively. Its subsidiaries, like Hai’an Cotton Spinning, contribute significantly to yarn-dyed fabric and shirt production, ensuring a steady supply of materials for internal use.
Lilang, another key brand under the group, faced challenges with its second brand, L2, due to slower-than-expected store openings and lower-than-expected sales. The company is repositioning the brand and adjusting its pricing strategy. A two-year reorganization plan aims to enhance terminal support and brand extension, with an expected gross margin increase to 24.7% in 2013.
Lilang’s five-year strategic plan, known as the “12345 Lilang Gene,†includes multi-brand development, a vision to become a top Chinese fashion brand, and a mission to offer simple yet refined lifestyles. Core values include innovation, hard work, sharing, and dedication, supported by strategic pillars like brand extension, improved operations, and supply chain optimization.
Xinxiang Chemical Fibers is also expanding, launching projects to upgrade fiber production. High-modulus fiber and spandex capacities are set to grow, with new facilities expected to boost annual profits by over 120 million yuan. Similarly, Huaxi Village is building a new polyester staple fiber line, which will increase production capacity by 50%, boosting sales and net income significantly.
Haidong Qing is advancing its recycling initiatives, expanding regenerated fiber and non-woven fabric production. These efforts align with the company’s focus on circular economy and environmental sustainability, aiming to develop high-end eco-friendly products for niche markets.
Weixing shares is leveraging its advantageous projects to attract downstream clients, transitioning from manufacturing to value creation. It is expanding its presence in the south and abroad, enhancing product value and competitive edge.
As the world’s largest button supplier, the company holds a 17% share in the high-end button market. Recent capital raising will fund four expansion projects, including laser-engraved buttons and high-end zippers, significantly boosting production capacity and profitability.
In summary, Shandong Ruyi continues to diversify its operations, expand its industrial chain, and focus on high-value products, positioning itself for long-term growth in both domestic and global markets.