Lack of Middle Managers Causes Slight Delay in Pan Brothers, Mitsubishi Projects

Pan Brothers, one of Indonesia's largest textile and apparel exporters, has clarified that its joint venture with Japanese conglomerate Mitsubishi for the construction of three garment factories was on track and expected to start production early next year. (B1 Photo/Muhammad Defrizal)

By : Rausyan Fikry | on 12:34 PM May 12, 2016
Category : Business, Corporate News

[Updated at 12:07 p.m on Saturday, May 14, 2016 to make clear in title and third paragraph that that the company is on schedule to finish Eco Smart. This article also has been clarified here]

Jakarta. Pan Brothers, one of Indonesia's largest garment and textile producers, has put on hold construction of three Eco Smart garment factories—a joint venture with Japanese conglomerate Mitsubishi—as they have not been able to find enough staff to fill middle management positions at the plants.

The projects should have started this year and are part of a $40 million investment over the next two years.

"We have not started Eco Smart 5th, 6th and 7th, since we have not found enough middle managers," Anne Patricia Susanto, deputy chief executive officer of Pan Brothers, said on Wednesday (11/05). Still, Pan Brothers assured that the issue only caused slight delay in the projects and remained confident that they would finish on time by June next year as it initially planned, the company said in a separate statement.

Anne said the company is also still looking for the perfect location for the plants, but they will most likely be in Central Java. The company had built the first four Eco Smart projects in the last few years.

Pan Brothers' other construction project in Tasikmalaya, West Java, under its new unit Teodore Pan Garmindo is progressing as planned. Completion is expected by the end of this year.

The Tasikmalaya plant will be able to produce 7 million to 14 million pieces of garment a year.

The company expects to increase its total production capacity to 90 million garment pieces a year this year from 70 million last year, as its plants in Ungaran and Demak in Central Java have already started production.

This will help reach the company's target of a 15 percent increase in sales to $481 million this year.

Pan Brothers already saw its net income jump by almost fivefold in the first quarter of this year to $3.7 million from $680,000 in the same period a year ago.

The company produces clothing for global brands such as Calvin Klein, Tom Tailor, The North Face, Hugo Boss, Nike, Adidas, H&M and United Colors of Benetton.

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