KARACHI, Feb 3: Rolling in liquidity and confident of unlimited demand growth in their domestic market, a few American companies are exploring investment opportunities in Pakistani textile business through acquisition and joint ventures.

The names of at least two companies are being taken that are reported to have negotiated in Karachi, Faisalabad and Lahore.

West Point Stevens and Danz River are the two USA-based textile sourcing companies that are reported to have entered into negotiations with a few textile companies in Lahore, Karachi and Faisalabad to explore acquisition possibilities and joint ventures. These two companies are involved in multi-billion dollars textile business and are exploring investment opportunities in India, China and Vietnam also.

A Karachi-based textile group — said to be one of the six biggest in the country that has a big stake in cement too — was initially targeted by the American companies and local business circles even mentioned a sum of $200 million for the deal.

However, one of the co-owners of the same Karachi company denied any such possibilities while maintaining that “we want to expand and diversify our business,” ruling out any indication of company changing hands.

Business circles, however, do not give any weight to this denial and insist that negotiations are still on and “for entirely business considerations, the Pakistani company in Karachi wants to keep a cover till something is finalised.”

While confirming the interests being shown by the American companies in acquisition and joint venture arrangements with Pakistan’s textile business, an official in the government said that under the changed rules the present government had allowed foreign investors 100 per cent acquisition of any business, including textile and full repatriation of profit.

“Not only this, the military led government is most obliging to business and more particularly to the foreign investors in Pakistan to give them all freedom of profit making,” remarked an independent economist and consultant, who said never before in last 60 years the profiteers, speculators and big business were given such taxes relief and price fixation liberties as by the present one.

Textile business sources say that quite a few American and European companies have closed down their business in their home countries and shifted their units to India and China. “Pakistan offers much more tempting environment for business than India,” remarked a senior official and made it clear that any negotiations between the European or American companies with Pakistan textile businesses enjoys full government patronage.

Senior textile businessmen recall that way back in decade of eighties when Suzuki set up a joint venture automobile project in Karachi, the Japanese investors then showed interest to set up joint venture in readymade garments in Lahore with a well known local business group. “But that group did not have the capacity or vision for such a project,” he said while pointing that the Japanese returned disappointed.

Since eighties, Japanese entered into joint venture arrangements also set up textile manufacturing units in China and now China is the biggest source of supply of high value textile products to Japan.

“Acquisition or joint venture with American or European companies will give access to Pakistani business to markets in USA and Europe where textile business volume is expected to touch $800 billion in next few years,” the official said.

“Textile business grammar has changed a lot after 2005,” a local garment exporter said adding, “The buyers in USA and Europe now want delivery of textile products at their doorsteps and on time. For this you have to have warehousing and outlet facilities in USA and Europe.

In last five years or so, the Indian textile business is going in a big way to enter into joint venture arrangements for setting up warehousing and outlet facilities in USA and Europe.

Pakistan is also taking up specific textile projects on joint venture arrangements on a rather bigger scale with China in next few weeks when Prime Minister Shaukat Aziz visits Beijing with a big delegation of businessmen.

On Saturday, Federal Textile Secretary Mr Masood Alam Rizvi held a meeting in Karachi with about two dozen leaders of textile and textile related businesses to discuss the projects that can be explored with Chinese investors either late March or early April when the prime minister visits Beijing.

The areas of collaboration in textiles are being identified under a five-year bilateral economic cooperation agreement signed between China and Pakistan when Chinese President last visited Pakistan.

The agreement covers a large area for mutual cooperation in which China has committed to provide investment, know how, production and marketing techniques, technical assistance, training and education in many areas, including textiles.

“Recognising Pakistan’s need for improving cotton growing and processing technology, developing chemical fibre industry, upgrading textile equipment and technology, boosting the international competitiveness of its products, China is willing to intensify cooperation with Pakistan in the above mentioned areas and to encourage business investment and technology collaboration in this regard,” reads one of the articles of the agreement.

“China will assist Pakistan in the whole chain of textile production from spinning to finished textile goods,” declares the agreement, which the officials in Saturday meeting said was a challenge to Pakistan textile business to demonstrate their capacity for acquiring skills and technology now being offered to them generously rather than begging for loan concessions and financial incentives.

Sources said that the meeting identified areas of textile machinery fabrication, dyes chemicals, textile technical education, polyester fibre, development of infra structure and many other related areas for drawing up specific projects that would be taken up for discussion with Chinese investors.