Over the past year, the global textile and apparel industry has gradually recovered from the trough of the post-pandemic period. Despite challenges such as geopolitical instability, rising logistics costs leading to fluctuations in raw material prices, and inflation dampening consumer shopping enthusiasm, we have observed a slow recovery in the confidence of European and American retailers as uncertainties begin to ease. After completing destocking, these retailers are progressively increasing their orders for textile products. Concurrently, Chinese domestic brands are capitalizing on the "national trend," achieving significant growth not only in China but also in the global market, thereby creating new opportunities for the textile industry.
Building on our strong market reputation and decades of experience, Texwinca has continued to provide our globally renowned customers with a comprehensive range of services, including yarn dyeing, fabric knitting, and dyeing and finishing services. In 2023, we successfully acquired a knitted fabric factory in Vietnam, extending our production footprint into Southeast Asia. This acquisition, combined with our integrated one-stop textile production base in Dongguan, enhances our dual-location production model in China and Vietnam, enabling us to deliver comprehensive and differentiated services to our customers. This strategic move aligns with the increasing demand for multi-country procurement to mitigate regional risks.
In our retail business, we implemented significant adjustments to our own brand “BALENO”. We finetuned our sales network in mainland China, concentrating resources on profitable stores while expanding our online retail presence to explore more flexible ways to distribute our quality products nationwide. At the same time, we enhanced our business presence in Hong Kong and Indonesia by launching new products that emphasize comfort and functionality, as well as introducing more IP collaborations to boost brand appeal. These initiatives have produced encouraging results, leading to a reduced operating loss.
Looking ahead, Texwinca will continue to strive for greater achievements in both the textile and apparel and retail sectors. Encouraged by positive customer feedback on our diversification efforts in Vietnam, we plan to double our textile production capacity there in the medium term and explore downstream expansion into garment manufacturing to broaden our offerings. Additionally, we will continue to monitor market conditions and consider further regional diversification of our manufacturing as needed. In our retail business, we will accelerate the transition towards a lighter asset position, with an increasing focus on e-commerce sales channel. By upgrading functionalities and enhancing the comfort and variety of our apparel products, as well as optimizing our retail network in mainland China, we are positive towards a financial turnaround of “BALENO”. Meanwhile, we will assess the feasibility of further expansion in Southeast Asia and other overseas markets through various models.
We have placed a strong emphasis on sustainable development along our development journey. Our commitment to reducing carbon emissions is evident in our daily operations, which include the installation of solar panels, the completion of a coal-to-gas conversion project, and the launch of a grid-connected project. Moreover, we are committed to the research and development of green and low-carbon textile products. Our efforts in this area are designed to meet the growing demand from our textile customers for sustainable materials, thereby supporting their own green initiatives and fostering long-term business relationships. Texwinca's approach to sustainability is not only about reducing our environmental impact but also about creating value for our customers and society. By focusing on sustainable practices, we aim to build a better future for our community and the environment.
Thank you for your continued support and trust in Texwinca. We look forward to achieving new heights together.
Poon Bun Chak
Executive Chairman