Texhong suspends textile project in Uruguay
January 27, 2014 (Uruguay)
China-based Texhong Textile Group Limited has officially announced suspension of its planned setting up of a viscose yarn manufacturing plant in San José Department in southern Uruguay, reports Primera Hora.
The decision of the firm to withdraw its plan to set up a textile plant with an investment of US$ 250 million is based on the weakening of the Brazilian real against the US dollar and the reduction of import duty on synthetic thread by the Brazilian Government.
The company has sent its closing statement to the San Jose Department after working for a year and a half on setting up the textile plant. The letter stated that the Texhong board decided to suspend the project primarily on two factors. First was the weakening of the Brazilian currency by 33 percent against the dollar. The exchange rate was 1.77 real for one US dollar when the project feasibility studies were carried out and it had increased to 2.35 real for one US dollar when the decision was taken. The second factor was the reduction of import duty on synthetic yarn from 25 percent to 18 percent by the Brazilian Government, the statement said.
In the new scenario, the manufacturing of viscose yarn in Uruguay for export to Brazil becomes unprofitable, so the company decided to suspend the project, Texhong said.
Texhong Group is one of the largest core cotton textile suppliers in the world and is a leading textile enterprise with focus on manufacturing high value-added core-spun cotton textile products, according to the company’s website.
Presently, the Group has over 1,600 customers, with sales network spread across China, Europe, South Korea, Hong Kong and Bangladesh. Headquartered in Shanghai, the Group operates 11 manufacturing plants in China, and has a production base in Vietnam with total production capacity of over 800,000 spindles and 900 air-jet looms.