Company to close plant

Adidas will close its only company-owned apparel factory in Suzhou, Jiangsu province, in a bid to improve efficiency in the Chinese market, a company spokeswoman said.

The spokeswoman said the company will shut down the plant, which employs 160 workers, at the end of October. It will then source its products from Chinese manufacturers. Adidas already works with 300 supplier factories in the country.

The move is part of adidas' efforts to restructure its business in China and globally to ensure efficiency, the spokeswoman said, adding the company will not reopen the factory elsewhere.

China's online news portal NetEase quoted a source at the Suzhou factory as saying the company will move the apparel production line to Myanmar. Adidas declined to confirm this on Wednesday.

Rising labor and raw material costs have been driving some manufacturers out of China, and prompting them to look for new opportunities in Southeast Asia. In 2009, Nike closed its only shoe factory in China, also located in Suzhou.

China is adidas' second-largest market, after the United States. But the brand is facing fiercer competition from both Western brands, such as Gap or H&M, and from China's domestic brands like Peak and Li Ning.

Xie Yu

(China Daily 07/19/2012 page15)