Comtex Case Study Solution

Introduction
Comtex Ltd produce a range of clothing such as dresses, jackets, intimate apparel and more. Comtex (HK) Ltd. is a joint venture in between the LT Apparel Group and the Hirdaramani Group of Companies. Currently, the company has one sourcing office in Jakarta and no factories in Indonesia. However, there is a decision regarding opening one in Solo in order to accommodate the increase in demand.

Figure 1: A few of Comtex’s Customers

Source: Comtex Sourcing - Customers

Comtex’s current goal is to be the best sourcing and manufacturing company in the apparel and fashion industry. As a result of setting high standards for themselves to achieve and maintain, Comtex has many stakeholders.

Figure 2: Comtex’s global network

Due to the problems in Bangladesh and Vietnam, there are various opportunities for the sourcing office based in Indonesia, which has a big population. That itself is considered beneficial in the plan to opening a factory in Solo, which has lower wages and a large workforce (Appendix 1).

However, it is still a question whether the project will be successful in the long-run as a factory in the garment industry is bound to incur losses in the first few years after it’s launch. According to the interviews, Comtex has invested in and is equipped with the latest technology and machinery, which makes it which makes it efficient and increases productivity. Additionally, Solo is the idea location for this new factory as a result of the many social, economical, and political benefits that the environment has (Appendix 2). Moreover in comparison to Vietnam, Solo has low turnover rates, as well as a large labour force (Appendix

But there is no uncertainty that the investment will be advantageous for Comtex Ltd, due to the long-term non-financial and financial benefits. Additionally, this investment is desirable for the company as it has a positive cash flow forecast that continues to increase without any major fluctuations in the cast inflows and outflows. Moreover, it will aid the business in increasing the production and satisfying it’s customers; hence, retaining and expanding it’s customer base. Furthermore, it will help Comtex’s sourcing office based in Indonesia, to gain a competitive advantage over the other sourcing offices across Asia. Therefore, the company should proceed with this decision.

Further Action: Biases and Limitation of Research and Sources
However, my analysis is susceptible to a few complications that lead to biases and limitations.

The Chief Executive Officer was quite optimistic towards the investment in the project; thereby, the interview is subject to bias.

Due to confidentiality issues, the financial data provided is based on the estimates which are influenced by the Financial Director’s opinions; hence, the financial analysis may be subjective. Furthermore, the financial data is prone to be outdated as Indonesia is prone to having quick changes in its economy every