[Edaily Shin Ha-yeon Reporter] “In the short term, we will focus on restoring profitability and improving cost efficiency, and in the medium to long term, we will expand our brand and high-value-added products to sustain stable growth.”

Seo Bong-soo, President of C-SITE Co., Ltd.(109670), made these remarks regarding future performance and growth strategies in an interview with E-Daily on the 21st. His plan is to boost profitability through production efficiency and diversification of customers and products, even amid a challenging business environment marked by a slowdown in U.S. consumer spending and tariff burdens.

C-SITE Co., Ltd. is an apparel original equipment manufacturer (OEM) and original design manufacturer (ODM) established in 1999. The company supplies knitwear to global retail brands such as GAP and Old Navy and operates production bases in Guatemala and Indonesia.

In the first half of this year, on a consolidated basis, the company reported revenue of 79.1 billion won, operating profit of 130 million won, and net income of 1.16 billion won. Although revenue decreased by 6% year-over-year, the company maintained an operating profit and returned to profitability. This is the result of a focus on cost efficiency, restructuring, and productivity improvements. Previously, consolidated operating profit had fallen by approximately 88%, from 1.25 billion won in 2024 to 150 million won last year.

President Seo cited a slowdown in U.S. apparel consumption, a decline in orders from major brands, lower utilization rates at overseas factories, and rising raw material and logistics costs as the reasons behind the deterioration in profitability. In particular, he explained that following the tariff policies of the Donald Trump administration, import and export costs—including ocean and land freight charges—for DDP (Delivered Duty Paid) transactions increased by at least 2.5 times compared to previous levels, thereby increasing the burden of selling, general, and administrative expenses.

However, the company expects a gradual recovery starting in the second half of the year. The third quarter is the peak season, with production of fall/winter (F/W) products concentrated ahead of U.S. Thanksgiving and Christmas.

President Seo stated, “Consumer sentiment is showing signs of a gradual recovery, and major buyers’ inventories are returning to normal,” adding, “Customer orders are being reflected in production volumes and factory operations; if this trend continues, we expect order volume and sales in the third quarter to increase compared to the first half.” However, he cited tariffs, geopolitical risks, and pressure from global brands to lower unit prices as potential variables.

The key to improving profitability lies in production automation. Following the introduction of automated cutting, trimming, and printing equipment at overseas factories, the company plans to expand automation to include finished product inspection, folding, and packing.

“We have confirmed on-site that automated processes increase productivity by at least 15–20% compared to manual work,” he said, adding, “We will further enhance production efficiency—from fabric input to finished products—through additional equipment.” The company is also accumulating production data for each process using AI to manage costs and productivity, and is restructuring its portfolio to phase out low-margin products.

While maintaining relationships with long-term clients such as Gap and Old Navy, the company is also moving to secure new brands. This is because the company recognizes that relying heavily on specific clients makes it difficult to respond to market changes.

President Seo emphasized, “While we will continue our strategic relationships with current brands, we are making the discovery and acquisition of new brands our top priority,” adding, “We will diversify our portfolio with a focus on trendy fashion items and high-value-added products.”

For the time being, the company will focus on improving the efficiency of its existing production infrastructure rather than expanding it further. The strategy is to boost profitability by leveraging Guatemala—which has a strong advantage in short lead times due to its proximity to the U.S.—and Indonesia, which offers price competitiveness and large-scale production capacity.

President Seo said, “Our priority is to maintain optimal productivity by making the most of our current production infrastructure,” adding, “In the future, if customer orders increase steadily and the feasibility of investment is confirmed, we may consider additional facility investments and the reorganization of our production bases.”