Faisalabad industrial zone: Chinese group to invest $2b, set up largest spinning unit

[Edevelop]

FAISALABAD: A major Chinese group has purchased about one-fourth of land in an industrial zone, run by the Faisalabad Industrial Estate Development and Management Company (FIEDMC), and is expected to make an investment of $2 billion to set up a big cotton spinning facility.

Shandong Ruyi Technology Group has bought 1,036 acres of land out of the total area of 4,500 acres. It will name its part of the project as “Shandong Ruyi Textile Park”, officials say.

Overall, 72% of land has been sold in the M3 Industrial City, one of the largest schemes in the country. Many leading industrialists of the city, known as Manchester of Pakistan, have also acquired big pieces of land for setting up industrial units.

Shandong Ruyi, the fifth largest textile company of China, will establish a 600,000-spindle spinning factory in the industrial estate, which will become the largest spinning unit in Pakistan.

According to officials, the textile park will create job opportunities for thousands of people, estimated at more than 35,000. Shandong Ruyi has its own cotton fields in Australia and Vietnam from where it will import cotton to meet the needs of the spinning mill.

To meet its energy requirements and avoid disruption of work, the company will install a 135-megawatt coal-based power plant to run its unit. After fulfilling its requirements, the company plans to sell surplus electricity to other industrial units.

“This provides a huge opportunity to ensure uninterrupted electricity supply for running industrial units,” said Amir Saleemi, Chief Operating Officer of FIEDMC, in an interview to The Express Tribune.

According to him, the spinning mill will have an annual capacity to produce 157,000 tons of yarn, 500 million metres of Batik fabric, 100 million metres of denim fabric and 10 million pieces of jeans.

The Chinese group would also provide energy to other textile units, easing the pressure on Sui Northern Gas Pipelines, he said, terming it a big project that would open doors to employment opportunities and bring foreign exchange.

The group has split the project into two phases. In the first phase, it will set up the largest textile mill and in the second phase workshops and equipment, vending and packing units will be established over an area of 536 acres. Apartments for employees will be built over 200 acres of land as per international standards.

Overseas investors

“New businessmen and investors are also investing in the industrial estate, particularly overseas Pakistanis from Dubai, United Kingdom, United States and other countries,” said Saleemi.

The estate would play host to textile, pharmaceutical, food, cereal, cosmetics, electrical panel and power industries as well as rice processing factories, he said.

According to Saleemi, Pakistan’s largest private-sector steel mill has already become operational there while the biggest rice processing unit will also be set up.

Value-addition chains, spread over 225 acres, for small and medium-sized industries had already started working in designated zones, he said.

This is a gigantic project which will play a vital role in boosting national output. It will take at least two years before big industries become operational. According to the rules and regulations, businessmen, who buy plots, are bound to construct factories within two years.

Coal-based power plant

Overall, 650 mills will be established in the industrial estate. Few of them have already started working including the steel mill. They will receive uninterrupted electricity supply from a 100MW coal-based power plant that the management will develop.

To facilitate new investors, FIEDMC has sold plots on installments spread over four years, a period when investors will be able to build their units and start production, making it easier for them to pay installments. “Our motive is ‘pay as you earn’,” said Saleemi.

The company will also provide a combined effluent treatment plant to reduce the cost of production. Duty-free access to the European market would also bring new investors, Saleemi said.

Faisalabad industrial zone: Chinese group to invest $2b, set up largest spinning unit – The Express Tribune

@hasnain0099

 

[Shabaz Sharif]

FAISALABAD: A major Chinese group has purchased about one-fourth of land in an industrial zone, run by the Faisalabad Industrial Estate Development and Management Company (FIEDMC), and is expected to make an investment of $2 billion to set up a big cotton spinning facility.

Shandong Ruyi Technology Group has bought 1,036 acres of land out of the total area of 4,500 acres. It will name its part of the project as “Shandong Ruyi Textile Park”, officials say.

Overall, 72% of land has been sold in the M3 Industrial City, one of the largest schemes in the country. Many leading industrialists of the city, known as Manchester of Pakistan, have also acquired big pieces of land for setting up industrial units.

Shandong Ruyi, the fifth largest textile company of China, will establish a 600,000-spindle spinning factory in the industrial estate, which will become the largest spinning unit in Pakistan.

According to officials, the textile park will create job opportunities for thousands of people, estimated at more than 35,000. Shandong Ruyi has its own cotton fields in Australia and Vietnam from where it will import cotton to meet the needs of the spinning mill.

To meet its energy requirements and avoid disruption of work, the company will install a 135-megawatt coal-based power plant to run its unit. After fulfilling its requirements, the company plans to sell surplus electricity to other industrial units.

“This provides a huge opportunity to ensure uninterrupted electricity supply for running industrial units,” said Amir Saleemi, Chief Operating Officer of FIEDMC, in an interview to The Express Tribune.

According to him, the spinning mill will have an annual capacity to produce 157,000 tons of yarn, 500 million metres of Batik fabric, 100 million metres of denim fabric and 10 million pieces of jeans.

The Chinese group would also provide energy to other textile units, easing the pressure on Sui Northern Gas Pipelines, he said, terming it a big project that would open doors to employment opportunities and bring foreign exchange.

The group has split the project into two phases. In the first phase, it will set up the largest textile mill and in the second phase workshops and equipment, vending and packing units will be established over an area of 536 acres. Apartments for employees will be built over 200 acres of land as per international standards.

Overseas investors

“New businessmen and investors are also investing in the industrial estate, particularly overseas Pakistanis from Dubai, United Kingdom, United States and other countries,” said Saleemi.

The estate would play host to textile, pharmaceutical, food, cereal, cosmetics, electrical panel and power industries as well as rice processing factories, he said.

According to Saleemi, Pakistan’s largest private-sector steel mill has already become operational there while the biggest rice processing unit will also be set up.

Value-addition chains, spread over 225 acres, for small and medium-sized industries had already started working in designated zones, he said.

This is a gigantic project which will play a vital role in boosting national output. It will take at least two years before big industries become operational. According to the rules and regulations, businessmen, who buy plots, are bound to construct factories within two years.

Coal-based power plant

Overall, 650 mills will be established in the industrial estate. Few of them have already started working including the steel mill. They will receive uninterrupted electricity supply from a 100MW coal-based power plant that the management will develop.

To facilitate new investors, FIEDMC has sold plots on installments spread over four years, a period when investors will be able to build their units and start production, making it easier for them to pay installments. “Our motive is ‘pay as you earn’,” said Saleemi.

The company will also provide a combined effluent treatment plant to reduce the cost of production. Duty-free access to the European market would also bring new investors, Saleemi said.

Published in The Express Tribune, June 16th, 2014.

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[Shabaz Sharif]

Well it will take 2 years at least, anyway why would they import cotton? Why not use Pakistan produced cotton?

 

[Edevelop]

They should improve worker wages. We are pretty unfair.

 

[SBD-3]

FAISALABAD: A major Chinese group has purchased about one-fourth of land in an industrial zone, run by the Faisalabad Industrial Estate Development and Management Company (FIEDMC), and is expected to make an investment of $2 billion to set up a big cotton spinning facility.

Shandong Ruyi Technology Group has bought 1,036 acres of land out of the total area of 4,500 acres. It will name its part of the project as “Shandong Ruyi Textile Park”, officials say.

Overall, 72% of land has been sold in the M3 Industrial City, one of the largest schemes in the country. Many leading industrialists of the city, known as Manchester of Pakistan, have also acquired big pieces of land for setting up industrial units.

Shandong Ruyi, the fifth largest textile company of China, will establish a 600,000-spindle spinning factory in the industrial estate, which will become the largest spinning unit in Pakistan.

According to officials, the textile park will create job opportunities for thousands of people, estimated at more than 35,000. Shandong Ruyi has its own cotton fields in Australia and Vietnam from where it will import cotton to meet the needs of the spinning mill.

To meet its energy requirements and avoid disruption of work, the company will install a 135-megawatt coal-based power plant to run its unit. After fulfilling its requirements, the company plans to sell surplus electricity to other industrial units.

“This provides a huge opportunity to ensure uninterrupted electricity supply for running industrial units,” said Amir Saleemi, Chief Operating Officer of FIEDMC, in an interview to The Express Tribune.

According to him, the spinning mill will have an annual capacity to produce 157,000 tons of yarn, 500 million metres of Batik fabric, 100 million metres of denim fabric and 10 million pieces of jeans.

The Chinese group would also provide energy to other textile units, easing the pressure on Sui Northern Gas Pipelines, he said, terming it a big project that would open doors to employment opportunities and bring foreign exchange.

The group has split the project into two phases. In the first phase, it will set up the largest textile mill and in the second phase workshops and equipment, vending and packing units will be established over an area of 536 acres. Apartments for employees will be built over 200 acres of land as per international standards.

Overseas investors

“New businessmen and investors are also investing in the industrial estate, particularly overseas Pakistanis from Dubai, United Kingdom, United States and other countries,” said Saleemi.

The estate would play host to textile, pharmaceutical, food, cereal, cosmetics, electrical panel and power industries as well as rice processing factories, he said.

According to Saleemi, Pakistan’s largest private-sector steel mill has already become operational there while the biggest rice processing unit will also be set up.

Value-addition chains, spread over 225 acres, for small and medium-sized industries had already started working in designated zones, he said.

This is a gigantic project which will play a vital role in boosting national output. It will take at least two years before big industries become operational. According to the rules and regulations, businessmen, who buy plots, are bound to construct factories within two years.

Coal-based power plant

Overall, 650 mills will be established in the industrial estate. Few of them have already started working including the steel mill. They will receive uninterrupted electricity supply from a 100MW coal-based power plant that the management will develop.

To facilitate new investors, FIEDMC has sold plots on installments spread over four years, a period when investors will be able to build their units and start production, making it easier for them to pay installments. “Our motive is ‘pay as you earn’,” said Saleemi.

The company will also provide a combined effluent treatment plant to reduce the cost of production. Duty-free access to the European market would also bring new investors, Saleemi said.

Faisalabad industrial zone: Chinese group to invest $2b, set up largest spinning unit – The Express Tribune

@hasnain0099

This zone was set up by Q-League but never saw any operation as the industry expanded within the city or alongside shaikhupura road. Only until the Chinese came in, the city would become operational. GSP+ is gonna do wonders not only for Pakistan but also for the investors in Pakistan.

 

[Bilal.]

Well it will take 2 years at least, anyway why would they import cotton? Why not use Pakistan produced cotton?

I think that's for their current factories in China not for this new unit the are building in Pakistan.

 

[AZADPAKISTAN2009]

2 Billion is alot for such company. US dollar or Rupees ?
If that company is importing cotton from outside Pakistan how does it help Pakistan to promote its cotton sales

Ambitious project no doubt

 

[Bouncer]

2 Billion is alot for such company. US dollar or Rupees ?
If that company is importing cotton from outside Pakistan how does it help Pakistan to promote its cotton sales

Ambitious project no doubt

Its better if they import cotton from abroad. The cotton produced in country is not unlimited, it will be used by other factories.
If I understood correctly, this plant will import raw material (cotton), do lots of value addition, and then export it. In the process, it will bring forex in the country which even after profit repatriation will be a boat load.

 

[Hyde]

2 Billion is alot for such company. US dollar or Rupees ?
If that company is importing cotton from outside Pakistan how does it help Pakistan to promote its cotton sales

Ambitious project no doubt

I am not sure if this project will ever be materialised but if it is, it's a great news for us.

I think they will be using the local production for as long as the rates are competitive, the reason they might be importing in addition could be lack of availability within Pakistan. If it's indeed a 2 billion dollar capacity, it's production/raw material requirement are going to be huge, Pakistan may not be so organised in this regard so it might be difficult to arrange raw material if they have not thought about it properly, hence the need to import raw material.

 

[Shabaz Sharif]

I am not sure if this project will ever be materialised but if it is, it's a great news for us.

I think they will be using the local production for as long as the rates are competitive, the reason they might be importing in addition could be lack of availability within Pakistan. If it's indeed a 2 billion dollar capacity, it's production/raw material requirement are going to be huge, Pakistan may not be so organised in this regard so it might be difficult to arrange raw material if they have not thought about it properly, hence the need to import raw material.

I think they will be importing only if they cannot find it from within Pakistan but either case the cotton price in Pakistan may rise due to this but the good thing is we are agricultural country meaning we can grow more cotton if demand arises and also it will be really beneficial for exports.

This is done deal at this stage. Also good to see chinese company building their coal power plant, which mean they will not depend on national grid.

 

[Hyde]

This is done deal at this stage. Also good to see chinese company building their coal power plant, which mean they will not depend on national grid.

I think 100-135 mw of plant will be quite expensive for an individual/private company. Not sure if that's ever gonnai happen. Best of luck to both Pakistan and China.

 

[Chak Bamu]

Well it will take 2 years at least, anyway why would they import cotton? Why not use Pakistan produced cotton?

A typical spinning mill in Pakistan is around 20,000 spindles. The mill in question is a very big project and therefore can not depend upon only one source.

To most people, cotton is just cotton. But in fact every region has different varieties with differing qualities. Pakistani cotton is typically short staple length variety with a bit more bulk. This makes it suitable for certain types of goods. For very fine threads (fine as in thin) Pakistani mills import cotton from Central Asia, Sudan, etc...

Owning cotton production areas is not common for Textile companies. I do know of an example in Madagascar where a sizeable textile mill grows its own cotton and produces finished cloth. It would require a good deal of organizational capacity to manage this.

@Aether, I believe if a Chinese company has gone to the extent of buying / leasing land in Australia, they can well manage production in Pakistan. I can not say about right now, but at least a few years ago, Pakistani mills were much more efficient than Chinese mills. Pakistanis are experts in this field - and there is no doubt about this. Pakistani Mills typically run 365 days a year. Energy supply woes have crippled us now, but rest assured if Chinese company can set up their own power plant, they sure can mint money here.

I can confirm that Pakistan's adoption of Chinese textile machinery between 1988 and 1994 gave Chinese confidence in their product. There are horror stories too of Chinese companies supplying sub-standard or even wrong specification machinery (knitting machinery), but the success of Chinese Textile Machinery Industry has a lot to do with Pakistan.

 

[Donatello]

I think 100-135 mw of plant will be quite expensive for an individual/private company. Not sure if that's ever gonnai happen. Best of luck to both Pakistan and China.

There are a number of private companies in Oil Refining, manufacturing who own their own plants. They sell the excess electricity to the grid. So nothing new there. A 100-135MW plant from China would cost 100-150million USD at most.

 

[Rahi812]

This zone was set up by Q-League but never saw any operation as the industry expanded within the city or alongside shaikhupura road. Only until the Chinese came in, the city would become operational. GSP+ is gonna do wonders not only for Pakistan but also for the investors in Pakistan.

Pakistan is building its whole industrial empire with the support of China. China is investing in the infrastructure and development in Asia, Africa and lately in South America. The reason China is popular as industrial developer is they are providing highest kick backs in their business deals. Sharif's are using these kick backs for building up these industrial infrastructures. Ultimately, Sharif's would be the other Mr. 25%.