Hong Kong-based Luen Thai Holdings, an international leader in apparel manufacturing and supply chain services, has acquired Singapore’s Ocean Sky Group for $55 million. The acquisition is part of Luen Thai’s long-term strategy to expand outside of China.
Currently, Luen Thai factories produce an estimated 90 million pieces, with combined values of $990 million, for Uniqlo, Adidas, Coach, and Esprit, among many others. Though Leun Thai is based in China, Chinese labor costs have risen dramatically in the last decade; to reduce labor costs, Luen Thai aims to expand its reach.
Luen Thai has already established bases in the Philippines and Indonesia, but Ocean Sky has established production sites in Cambodia, Vietnam, and Singapore, where labor is relatively cheap. Ocean Sky produces about 60 million garments per year, and employs over 8,400 workers.
The company says the Ocean Sky acquisition will also expand Luen Thai’s customer base. “The acquisition is in line with Luen Thai’s expansion strategy,” Luen Thai CEO Henry Tan told just-style. “Ocean Sky’s products, markets and clients are an excellent complement to, and offer synergy across, the spectrum of the group’s business.”