Chinese businessmen are all set to make sizeable investment in Pakistan’s textile industry to keep a firm hold over the global textile market, said business leaders on Thursday March 27. The Chinese are said to be exploring the possibilities of setting up composite textile parks having spinning, weaving and garments units as well as viscose plants, it was learnt.
“During the last eight months, a number of textile entrepreneurs from China have visited Pakistan,” said SM Tanveer, chairman of Punjab Industrial Estates Development and Management Company (PIEDMC). A China-based Shandong Ruyi Group has already acquired majority shares in Masood Textile Mills, Faisalabad. The same group expressed its intention to establish a 600,000 spindle spinning mills in Faisalabad, said Tanveer. There are other Chinese investors who want to acquire running textile mills in Pakistan, he added.
PIEDMC chief said around 24 chief operating officers – few of them were textile entrepreneurs – of Chinese industries are currently on visit to Pakistan. The visiting Chinese wanted to set up viscose plant. He said they would use delinters to remove cotton seed from lint to produce viscose that is the best manmade fiber having the similar characteristics as those of cotton fiber. This will usher the local textile industry into the new era of value-added products, he added.
PIEDMC chairman said that Shandong Ruyi’s representatives had invited its delegation to China to get the first-hand knowledge of how textile parks operated. The Chinese group offered to establish a two billion dollars textile park in Punjab in partnership with PIEDMC, said Tanveer. According to a group’s proposal, the industrial development company could provide a land for the park as equity or build infrastructure in line with the Sundar industrial estate and that would raise its equity in the project, he said.
The group would remain the major sponsor of the project by building spinning weaving, finishing and apparel factories with a soft loan from Exim Bank of China. It would also set up a coal-based power project and a common water treatment plant to ensure smooth and globally-compliant operations of the proposed textile park. The group wants to seal the deal in the early April. Chief Minister Punjab has sought PIEDMC’s recommendations, Tanveer said.
Group leader All Pakistan Textile Mills Association (Aptma) Gohar Ejaz said that another high level Chinese textile delegation was expected to visit Pakistan next month. He said Chinese interest in Pakistan is understandable. Most of the developed economies like Britain and Japan owe their initial economic success to their textile sectors, he said. However, he added, as the per capita incomes in these economies have increased, making of low value-added yarn and fabric becomes unviable for them due to rise in wages. Ejaz said China is facing the same problem. Its per capita income has crossed $6,500 as against $1,300 in Pakistan. Now, the Asian economic giant, he said, has two options: say goodbye to textile business or relocate its industries to continue its grip on the global textile market. Of course, they are going for the second option, he added.
In the first phase, they would relocate their basic textile industries and low value-added apparel factories to Pakistan and other low cost countries. Aptma leader said China would continue producing high value-added products at its place and buy raw materials like fabric from low-cost partners in other countries.
He said there is a strong possibility that the Chinese would export the low cost apparel from their factories in countries like Pakistan back to China for domestic consumption as well as other markets. This way, he added, they will maintain their footprints in global textiles for a long time. This will be a good opportunity for Pakistan as well because it will enlarge the range of garments that Pakistan will be able to export.
