Reuters was reporting on Friday that Malden Mills expects to post a $9.8 million profit in its first full year out of bankruptcy protection. The company expects a $9.0 million loss in 2002.
Net sales are seen “approaching $178 million” in the companys fiscal 2004, which commences November 1.
The Projections assume that Shanghai Challenge Technologies, a Malden Mills joint venture, will help increase production capability. The report indicates that recently filed financials show that “an increasing amount of production” of the companys Palartec fleece will take place in Shanghai, China. A majority of the fabric will still be made at the Lawrence facility. The 1,200 workers in Lawrence are not expected to be affected.
The move is seen as an offensive move to bolster Asian sales for Polartec, utilizing an “Asia-for-Asia” strategy similar to what Malden in Europe when it opened its German plant in the mid 90s.
Reuters said that “annual sales of Malden Mills products in the Pacific Rim dropped below 1 million yards of fabric from more than 3 million. Asian rivals undercut Malden Mills with lower production costs.”
Fiscal 2005 sales are expected to reach $184.5 million with net income projected at $14.3 million. The plan suggests Asia will account for 21% of total yards sold.
Malden is expected to emerge from Chapter 11 bankruptcy protection by Labor Day.
