Yue Yuen Industrial (Holdings) has set aside about US$100 million for acquisitions this year to expand its China wholesale and retail business, executive director Steve Li I-nan said.
Hong Kong-listed Yue Yuen, which makes sneakers for Adidas and Reebok, was now in talks on several potential acquisitions, he added.
'Every year, we have three to four companies on average we talk to for mergers and acquisitions,' Mr Li said.
With the acquisitions, retail and wholesale business in the mainland could 'easily exceed 10 per cent' of the company's total turnover in two years, he said.
Yue Yuen derived 8.3 per cent of its sales from China retail and wholesale business in the fiscal year to September 2006, up from 5.4 per cent in the previous year. Revenue from China retail and distribution soared 80.4 per cent to US$305 million.
The company has also budgeted a capital expenditure of US$200 million to add 25 to 30 additional production lines this year. At present, Yue Yuen has 373 production lines in China, Vietnam and Indonesia.
Sports-shoe manufacturing accounted for 57.7 per cent of Yue Yuen's revenue in the previous fiscal year.