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Perth-based wool products company Merino & Co (ASX: MNC) has wasted no time in ramping up operations since listing on the ASX at the end of last month by securing a new manufacturing, storage and distribution base at Wangara and tripling its manufacturing capacity with new automated machinery.
Merino & Co has secured a long-term lease on a 1,400sqm industrial facility in Perth’s north which almost doubles the space of premises currently occupied by the company.
Merino & Co has also ordered four automated weaving loom machines, and four automated sock-knitting and sewing-and-setting machines, delivery of which is expected in February.
The company has also leased an extra 15 knitting machines that, combined with the new machinery, will almost triple the current garment manufacturing capacity and lower the unit cost of production.
Merino & Co, which was founded by Fiona Yue and Tim Kang, is one of the few merino apparel brands that manufactures in Australia. The $6.35 million raised from the IPO is being deployed to scale its local manufacturing capabilities for a diversified range of merino wool products.
The company says executives recently returned from China where they assessed the suitability of the machines and materials, while also engaging with a new supply and distribution network.
“As part of our strategy to offer a more fulsome product range of fine Merino wool products, we have now ordered our first batch of highly automated machines to manufacture socks, scarves, shawls and throws,” says Yue, the CEO of Merino & Co.
“When this added manufacturing capability is in place, Merino & Co. will be able to develop its own branded range of high-quality merino socks to meet growing market demand.
“I look forward to providing further updates as we continue to expand our capabilities, and work towards our vision of delivering high-quality Merino wool products to new and emerging global markets.”
Shares in Merino & Co were 4.5c higher at 48.5c at 11.41am (AEDT) valuing the company at $35.8 million. The stock is trading well above its issue price of 20c, although significantly lower than the temporary spike to $1.50 which occurred just days after listing.
The share surge led to an ASX price query on 7 November with the company responding that it had no reason for the skyrocketing price other than speculating that it was due to “positive press exposure” raising its profile following the ASX listing.
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