Yue Yuen reported diversifying its footwear manufacturing capabilities by entering India to access labor and as it looks for access to manufacturing outside of China. Yue Yuen is China’s largest athletic and outdoor footwear manufacturer, serving some of the more iconic brands in the U.S. and European markets.
The Project Company, an indirect wholly-owned subsidiary of Yue Yuen Holdings, incorporated under the laws of India as a private company with limited liability, entering into the Memorandum of Understanding with India’s Tamil Nadu Government, accordingly the Project Company will invest approximately 23 billion Rupees, equivalent to approximately US$276 million, in phases in a project to establish footwear manufacturing in the country.
The Project Company will invest in a development project to establish the Group’s manufacturing base in a special economic zone (SEZ) to be established by the State Industries Promotion Corporation of Tamilnadu, Ltd in Ulundurpet, Kallakurichi District, Tamil Nadu (the “Project”) within the Investment Period of 12 years in two phases.
“In the long term, the Group remains optimistic about the prospects for global sportswear demand alongside continually increasing awareness of health and wellness and the ongoing ‘athleisure’ trend,” Yue Yuen stated in a disclosure outlining the company’s reasoning behind the move. “The Board considers that it is beneficial for the Group to diversify its manufacturing bases and capacities to India, as India offers a large supply of labor and extends favorable government policies to support the sustainable growth of the Group’s business. Therefore, the Directors are of the view that the investment in the Project would be able to expand and diversify the Group’s production capacities in an economically sound manner and also fulfill its corporate social responsibility to make a positive contribution to the neighborhood communities.”
