Newyalu eyes foreign down-jacket markets

Jiangsu Newyalu Group Co Ltd, one of the country's largest down-jacket manufacturers, is striving to build brand recognition overseas, and may acquire foreign companies next year.

"Despite our excellent performance, we have yet to become a famous brand for down-jackets overseas," said Gu Zhenghua, president of Newyalu.

"Now we are considering acquisitions of companies or brands in the United States for quicker, more effective penetration into the market next year," he said in an interview with China Daily.

Newyalu started to directly export its down-jackets last year, mainly to the United States and Japan. It also sells its products to Canada, Russia and the European Union.

According to Gu, the company holds about a 10 per cent share of the US down-jacket market, but has failed to build strong brands so far. Newyalu has set up a joint venture with a US counterpart and sells its products as an original equipment manufacturer.

"That's not the way we want to proceed as we expand overseas - we need our own brands to be known," said Gu.

To date the company has registered its trademark Yalu in 16 foreign countries and regions including Germany, Spain and France.

"We are financially strong enough and well-prepared for such opportunities," he noted.

The company's total sales revenue hit 1.6 billion yuan (US$192 million) last year, up 50 per cent year-on-year. Meanwhile, it set up two new manufacturing plants.

"It was the best year in our history, but we are striving for a better record - a 50 per cent growth in revenues in 2005," said Gu.

Commenting on rumors of potential initial public offerings (IPOs), Gu said "we were once very eager for IPOs."

The Jiangsu-based company, founded in 1972 as a township and village enterprise for clothing, transformed itself into a shareholding company as early as 1993, the first firm to do so in the eastern province.

However, as the government was in favor of key sectors and large State-owned enterprises when assessing IPO proposals, the clothing manufacturer was rejected.

"But now we find IPOs not so urgent, as we are focusing on building our brands and sales network," said Gu.

While most domestic companies seek IPOs to raise funds, Newyalu, with very small debts, has sufficient capital for business expansion, he explained.

Meanwhile, Gu expects the company's annual exports to hit US$25 million this year and reach US$100 million by the end of 2008.

Export volume reached US$10 million in 2004, accounting for about 10 per cent of sales revenues.

"This year, we expect 20 per cent of revenue to be derived from exports," said Gu.

The company, which began to specialize in down-jackets in the late 1990s, has grown into a leading brand for fashionable and leisure-styled jackets. Its total assets are estimated at 1.2 billion yuan (US$144 million).

Bosideng and Yaya are the company's major domestic rivals.

Source: China Daily