Kintex Garments reports lower earnings in Q3, hopes to make up in Q4

Kitex Garments’ earnings in the third quarter were impacted because of delayed winter in the US, with which it has the largest business. The Kerala-based manufacturing unit, which is the world’s third largest supplier of infant wear, to companies such as Gerber, The Children’s Place and Walmart, had to hold back its supplies by 2-3 weeks because its US clients wanted to hold on to inventories. They were able to ship supplies only in end December, which the company believes will make up for the losses in the fourth quarter.

Kitex Garments were set up in 1992 and started production in 1996 on its 102 acre world-class facility in Kochi. It manufactures all types of garments, of which the largest percentage is of kidswear.

Presently, the company is in debt which has two components, packing credit and term loan. The first one is of Rs 105 crores of which Rs 66 crores has already been diluted while the second is Rs 33-35 crores. Repayment of the latter will take at least two years because it is under TUFS scheme.In the packing credit, the balance USD9 million will be repayed in a week’s time.

The business that Kintex Garments does with US-based Jockey has fallen by 50 per cent as compared to last year. This is because in the US the fashion trend has converted from cotton to synthetic materials. As Sabu Jacob, CMD, Kintex Garments says, the company doesn’t make synthetic garments but if it has to then it will have to import it from Taiwan or China. ‘At this point we are looking at the logistics and economic side of it.’