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An overview of Hansae's headquarters. / Courtesy of Hansae Co.

Hansae Co. is expected to see improved earnings for the second quarter of this year, and starting from the second half, it will embark on a restructuring of its manufacturing framework centered around its Guatemala production base. Industry observers are keeping a close watch on whether this transition—which marks the full-scale kickoff of its vertical integration combining textile and garment production processes—will simultaneously drive manufacturing efficiency and profitability.

According to financial information provider FnGuide on July 6, Hansae's consolidated revenue for the second quarter of this year is projected to reach 526.3 billion won and its operating profit 16.9 billion won. These figures represent a 10.8% and 37.3% increase, respectively, compared to the same period last year. Securities analysts attribute this to a dual recovery in revenue growth and profitability, fueled by a rebound in customer orders and improved performance from its textile subsidiaries.

The turnaround is underpinned by the recovery of its fabric and materials affiliates. Revenues from subsidiaries like C&T Vina and Color & Touch expanded due to peak-season demand, contributing to the parent company's overall top-line growth. Color & Touch, in particular, is understood to have maintained its growth trajectory by increasing sales to external clients.

By client, shipment volumes to Gap—Hansae's largest buyer—declined slightly in the second quarter, but orders from other major brands like Aeropostale and Carhartt maintained a steady flow. An increased share of relatively higher-margin brands also helped defend profitability. Big-box retail channels in the U.S., such as Walmart and Target, which had slumped in the first quarter, are also estimated to have recovered to last year's levels in the second quarter.

Rather than short-term earnings, however, the industry is focusing heavily on the structural shift in manufacturing slated for the second half of the year. Starting in the third quarter, Hansae plans to fully operationalize its new factory within the Michatoya Pacífico Industrial Park in Guatemala, establishing a vertically integrated framework that encompasses the entire pipeline from spinning to garment manufacturing. This will allow the company to secure an end-to-end production system ranging from yarn to finished products.

Guatemala represents one of Hansae’s core manufacturing hubs in Central America. The company’s non-current assets in the region rose from 78.0 billion won in the first quarter of last year to 178.7 billion won in the first quarter of this year. Along with running the new facility, the firm intends to expand automated equipment and streamline manufacturing processes to sharpen its competitive edge.

The "Smart Pigment" dyeing process, currently deployed at its Vietnam and Indonesia factories, is also scheduled to expand to its Central American production bases—including Guatemala—starting in the fourth quarter. This technology simplifies traditional dyeing methods to cut water consumption by roughly 40%, and is expected to boost the company’s eco-friendly manufacturing profile.

Hansae currently operates production networks across eight countries: Vietnam, Indonesia, Myanmar, Nicaragua, Guatemala, Haiti, El Salvador, and the United States. The industry anticipates that the Guatemala base will serve to both strengthen responsiveness to the North American market and optimize manufacturing efficiency within Central America.

"Recently, global apparel brands look at eco-friendly manufacturing capabilities alongside price competitiveness as a critical metric when choosing partners," a fashion industry insider noted. "Expanding eco-friendly processes at the Guatemala production base can be viewed as a strategic investment to stay ahead of tightening global environmental regulations."

                                                                                                       Lee Chang-yeon