TOKYO — In an effort to build its presence in the Chinese consumer market, Itochu Corp., a leading Japanese trading company, next year plans to begin producing garments in Ningbo in partnership with Ningbo Youngor Group Co., one of China’s largest apparel manufacturers.
The joint-venture company, Ningbo Youngor Knitting Dyeing & Finishing Co., will build an integrated knitting, dyeing and sewing plant that is expected to go into operation in January with an annual capacity of eight million pieces of knitwear for sale on the domestic Chinese market.
The planned facility, according to a company spokesman, will be capable of producing 2,400 metric tons of circular-knit fabric and dyeing 7,200 tons of fabric annually. It is expected to employ about 950 workers. The project will produce casual sportswear that will be sold through Youngor’s 1,300 shops throughout China.
Beijing is scheduled to host the 2008 Olympic Games. With Chinese consumers becoming wealthier and more fashion conscious, and athletics expected to be a major subject of local interest in the buildup to the Olympics, the companies anticipate rising demand for sporty clothing in the coming years.
The joint-venture firm, capitalized at $20 million, is funded 70 percent by Youngor, 20 percent by Itochu, 6 percent by the Hong Kong investment firm Suntex Hong Kong Ltd. and 4 percent by Matsunaga Co., a Japanese apparel manufacturer based in Ichinomiya, near Nagoya.
Itochu is one of the growing number of Japanese companies setting up textile and apparel manufacturing in China, which has become a member of the World Trade Organization and is obligated to open up its market to foreign investment under that organization’s rules.
The coastal area along eastern China centering on Shanghai is becoming China’s largest apparel production center, where one-half of China’s apparel production is concentrated, Itochu said.
The Japanese trading firm has already invested in four other major projects in China: Jic Garments (Ningbo) Co., which produces 120,000 suits a year; Ningbo Notokinu Industry Co., which makes 1.7 million linear yards of interlining; Ningbo Veken Textile Co., which produces 12,000 tons of spun yarn, and Ningbo Sunrise Textile Dyeing & Finishing Co., which dyes 27.5 million linear yards of fabric.