Reuters Africa reports that Mauritius clothing group Ciel Textiles posted a 52% slump in its first-half pre-tax profits this week, blaming the soaring cost of its key raw material cotton.

A report this morning said that the group, a supplier to British clothing retailers Marks & Spencer, Next and Inditex’ Zara, said pre-tax profit dropped to 54.3 million rupees for the half year ended 31 December from 114.07 million rupees a year earlier.

Half-year profitability was said to be down compared to last to year due primarily to capacity building costs in Asia and the group’s difficulty to pass on the full increase in raw material cost to its customers. Cotton prices increased by almost 100% last year due to strong demand and limited global stocks.

The report says that Ciel’s order book for the coming quarter looked solid but the risks of a sustained rise in prices of raw materials remained.

Ciel Textile which employs 17,363 people in textiles in the region is a leading manufacturer in the African Sub-Saharan Region and is said to be largest Woolmark knitwear supplier in the world. The group operates as a regional ‘one-stop shop’, with vertical integration from spinning to finished products, offering complete apparel solutions for men's, ladies and childrenswear.

The group has operational units in Mauritius, Madagascar and India, and continues its efforts to compete with European manufacturers moving towards the up-market. This strategy, Ciel says, involves investing in the latest technology, broadening its product range and the reinforcement the human resources of the group. The group has 8 business units: knitwear, knits, shirts, bottoms, spinning, weaving, dyeing and retail. Through its retail unit, CieI commercialises the brand Harris Wilson and Floreal Boutiques.

In garment manufacture, Ciel owns the well known Floreal Knitwear which has knitwear operations in Mauritius, Madagascar, China and Bangladesh and Tropic Knits which has circular knitting plants in Mauritius and leisurewear making up units in Madagascar. In fabrics and yarns the Ciel group owns Consolidated Dyeing & Fabrics which knits fabrics in Mauritius and Ferney Spinning Mills which spins carded yarn for knitwear and weaving in Mauritius.

Source: Reuters Africa