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

Purchases 1,036 acres of land to establish a textile park.

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 16^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.