SPORTS shoe manufacturer Yue Yuen Industrial (Holdings) has increased its profits by 47 per cent, thanks to low production costs in China compared with its competitors in South Korea and Taiwan. The company yesterday said taxed profit for the year to September totalled $440.56 million, compared with $300.64 million in the previous year. However, profit margin was squeezed as turnover more than doubled to $3.16 billion from $1.54 billion. Basic earnings per share were 20 cents and directors declared a final dividend of five cents a share. ''The growth of business primarily derives from new customers and existing customers who have increased their portion of purchases from China due to the rising costs in Korea and Taiwan,'' said company chairman Tsai Chi-neng. ''These customers tend to consolidate their purchases from several key factories which can provide better control over quality and delivery. In this respect, the group is considered a partner factory to a number of brand-name customers,'' he added. Yue Yuen increased its customer base for footwear brands from 13 to 17 during the period. Total shoe output rose to 22 million pairs from 13 million in the previous year. In addition to the production of traditional sports casual shoes, Yue Yuen started producing some outdoor shoes. Since the group was founded in 1988, its core business has been in the production of athletic and leisure footwear for customers including Avia, Converse, LA Gear, New Balance and Reebok. Through a joint venture in Dongguan, Guangdong province, the company has launched sales to China. The venture has five sales offices in Guangzhou, Shanghai, Beijing, Chengdu and Shenyang and it has distributed licensed Converse performance shoes to more than 50 major outlets in China. The venture also leased several retail spaces in department stores in Shanghai and Chengdu for Converse shoes. Yue Yuen said it recently completed construction of its plant in Zhongshan, with six buildings for production of footwear and another six for dormitories.