US tycoon buying into China textile plant

US billionaire investor Wilbur Ross, known for buying and resuscitating distressed companies, will pay about US$50mil for a controlling stake in a Chinese denim maker and plans to buy textile makers in Vietnam.

Ross said he agreed to buy a 51% stake in a US$100mil textile factory in the eastern city of Jiaxing, and would fund 60% of his purchase with Chinese bank loans and the rest with equity.

Ross said he was also looking for textile and garment factories to buy in countries such as Vietnam.

"It''s our objective to be a consolidator of the textile industry globally,'''' he said in an interview. "It''s our longer term strategic initiative to be the first truly global and very large textile producer.''''

Ross''s decision to buy into the Chinese factory comes in the same week the United States stopped importing China-made knit shirts and underwear under a unilateral quota system it imposed two months ago to protect domestic workers.

The United States and Europe had complained of a surge in cheap Chinese textile and garment shipments this year after a 40-year global quota system expired in January.

The Chinese textile factory would supplement production in the United States, Ross said.

China, the world''s biggest textile and clothing exporter, sold a record US$97bil of fabrics and garments to the United States last year, according to the China National Textile and Apparel Council.

Bloomberg