A GLOBAL textile manufacturing business with its roots in Co Armagh is set to open a new yarn-spinning factory in India in a bid to reduce its exposure to pricing volatility in China.
Union Street (Lurgan), whose registered address is at Clarendon Dock in Belfast, revealed the move in its just-published annual accounts, which reveal another year of double-digit sales growth.
The company, founded in the halcyon days of the linen trade in the north, is primarily now involved in weaving, dyeing and finishing of linen and linen cotton fabrics, for sale to the clothing sector.
It continues to weave, dye and finish in both Ireland and India, where its staff costs are a fraction of what they would be at home.
But the company, whose sales rose by 19 per cent in the year to last April from just shy of £39 million to £46.4 million, is also feeling the pinch from price fluctuations in Asia.
In a strategic report accompanying its financials, the directors (its controlling shareholder and lead director is 62-year-old James Baird, a fourth generation member of the linen trade Baird family) confirmed Union Street was in the process of establishing a new factory in India.
“It is anticipated we will be in a position to spin half of our yarn requirements by April 2020, thereby reducing our exposure to Chinese yarn manufacturers, who increased prices substantially in the early part of 2018.
“It is the board’s expectation to increase the group’s production capacity at its spinning factory in order to produce all of its yarn requirements by the end of the financial year April 2021.”
Union Street, which sells more than 90 per cent of its wares outside either the UK or Europe to major worldwide conglomerates, saw its profit after tax almost halve from £813,765 to £420,333.
But over the year its staff numbers increased from 653 to 683, most of them operating at factories in India.
As a result, the wages bill rose from £5.4m to £5.96m, which on a very crude measure makes the average salary just £8,726 (although this isn’t accounting for differences between top managers and basic operatives).
While that is less than a third of current UK wages, it is however more than double the current average pay in India, which is 355,200 rupees or £3,850.
Meanwhile subsidiary company WFB Baird, which was also once based in Lurgan and specialised in the fine end of the linen trade (cambrics, sheers, corded linen handkerchiefs etc), saw its turnover rise by nearly a third over the year from £7.9m to £10.2m, while it also saw a 10 per cent uplift in operating profit from £1,973,000 to £2,176,000.
“In the context of a challenging trade environment in the world apparel market, the directors are satisfied with the performance,” it said.
