Branded apparel manufacturer Gildan Activewear Inc. of Montreal, Canada has announced to invest US $ 125 million in production capacity during the 2017 fiscal year. The investment will support Gildan’s future growth, primarily for textile capacity related to the continued development of the Rio Nance 6 knitting facility in Honduras and capacity expansion along with garment dyeing as well as sewing facility expansion in Bangladesh.
Gildan said that the investment for knitting facility will help the company meet its production capacity needs as well as help achieve its sales growth target for higher-end products, planned for FY 2017 and optimize production efficiencies at its other textile plants.
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According to Gildan, the expansion is an outcome of achieving a noteworthy 8.1 per cent increase in consolidated sales in the fourth quarter of 2016 compared to the corresponding quarter in 2015. Growth was primarily driven by the impact of the Alstyle and Peds acquisitions (contributed US $ 50 million in sales in Q4) in July 2016 and organic unit sales volume growth in Printwear which were sold in lower net selling prices.
With all the expansion and investment plans by Gildan, net sales in 2017 in the Printwear and Branded Apparel segments are each expected to increase in the high single digit. For Printwear sales, the company is assuming overall unit sales volume growth, including continued penetration in the fashion and performance segments of the North American market, and double digit international Printwear shipment growth which is expected to offset the assumption of unfavourable foreign exchange impacts.
