Penang-based packaging firm Magni-Tech Industries Bhd will be acquiring South Island Garment.
Magni-Tech now makes inner packaging boxes, flexible plastic packaging materials and corrugated fibreboard cartons. Packaging firm has been facing intricate market conditions as a result of keen contest in the packaging industry.
This purchase is expected to reduce Magni-Tech's reliance on the packaging business and is likely to provide them with a new source of income, enhancing their future earnings.
South Island Garment business is largely dependent on the sale of woven sportswear to Nike, Inc.
SIG has been working with Nike over the past two decades and Nike had recently clued-up SIG that it has been appointed as one of Nike's tier-one woven manufacturers worldwide.
This will endow SIG with a competitive edge over other garment manufacturers in Nike's global sourcing decisions.
SIG owns and operates two manufacturing plants in Penang that brag a joint production output of 11 million garment pieces, with Vietnam producing 70 percent of this volume.
Company established three contract manufacturing facilities in Vietnam through joint ventures between 1996 and 2002.
Company has a strategy to expand in Vietnam by aiming a 10 percent increase in production.
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