Founder Cai Jianzhong resigned as Hutai Textile, a knitting giant that will spend 1.3 billion yuan to build a new base in Vietnam

On June 13, the local knitting giant, Hutai Textile Holdings Limited (hereinafter referred to as "Hutai Textile"), announced that the Company received a notice from Mr. Cai Jianzhong that Mr. Cai had decided to resign as a non-executive director and all positions of the Company due to his advanced age, effective June 12, 2019.

As of now, the executive directors of Hutai Textile are Yin Huilai, Du Jiewei and Ishii Junya, the non-executive directors are Liu Yaotang, and the independent non-executive directors are Chen Yuguang, Wu Qinghua and Shi Guorong.

Born in 1936, Cai Jianzhong is a non-executive director and one of the founders of Hutai Textile, Mr. Cai co-founded Hutai Textile in 1997 and served as the chairman of Hutai Textile from the establishment of the company until 2005. He is currently the Honorary Chairman of Hutai Textiles and a director of several subsidiaries of Hutai Textiles, with about 50 years of experience in the textile industry. In 2010, he was awarded the Lifetime Achievement Award of China Knitting Industry by the 4th Council of China Knitting Industry Association. In April 2018, Cai Jianzhong was awarded the Gold Award Tinct Ind. by the British Society of Bleachers and Dyers in recognition of his contributions to the printing and dyeing industry and education in Southeast Asia.

According to the financial report, for the full year ended 31 March 2018, Hutai Textile achieved operating income of HK$6.098 billion, an increase of 1.74% year-on-year; the company's gross profit was HK$947 million, a decrease of 15.17% year-on-year; profit attributable to the company's owners was HK$744 million, a decrease of 23.73% year-on-year; and basic and diluted earnings per share were HK$0.51. Proposed final dividend of 18.5 HK cents per share.

According to Uni-Pacific Textiles, the decrease in profit was due to the fact that there was no return on the impairment provision for the equity of an associate company during the year, an increase in expenses of approximately HK$100 million to cope with the annoying sharing of higher fixed costs and the cost of customer claims due to the suspension of production at the Vietnamese plant, and an increase in production costs such as yarn, chemicals, labour, coal and RMB appreciation.

First Textile Network previously reported that Hutai Textile announced not long ago) announced that in order to meet future expansion and risk diversification, the company is preparing to select a suitable location in northern Vietnam to establish a new production base. Subject to the geographical conditions of the site selection, the cost of building the plant and environmental protection facilities and the production plan (which may change with the market conditions at that time), the total investment amount (to be paid in stages according to the development situation) is currently expected to be about HK$600 million to HK$1.3 billion.

If the acquisition of land is planned to be realized in the next financial year to build a new plant, the expected start-up of the new plant will begin around 2022-2024, and the Group's overall production capacity may be increased by about 3 million pounds to 8 million pounds per month after the new plant is put into production.

According to the first textile network reporter, the board meeting of Hutai Textile will be held on June 20, when the ice release of the company and its subsidiaries in the 2019 fiscal year annual results announcement will be approved.

As of the time of the first textile network reporter's press release, Hutai Textile closed at HK$6.21/share, down 1.43%, with a market value of HK$8.982 billion. (First Textile Network Martin)