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Three Gun eyes foreign investors

Published: 2004-12-06
Shanghai Three Gun (Group) Co Ltd, one of China's largest producers of knitted underwear, is seeking overseas partners to help it grow.

This move is likely to lead to a flurry of activity to attract more foreign firms to help upgrade the city's textile industry.

Three Gun is now in contact with the Chicago-based Sara Lee Corp, a global consumer packed goods company that boasts underwear as one of its core businesses.

It wants to extend the two firms' current product-focused cooperation, hopefully leading to Sara Lee Corp's acquisition of a considerable part of State-owned Three Gun's shares, according to company sources.

But the timetable for the negotiations remains veiled in secrecy as all the parties involved want to remain "rather prudent" in handling such equity operations, according to Zhou Yanmin, spokeswoman for Shanghai-listed Shanghai Dragon Corp, Three Gun's parent company, which is also involved in the negotiations.

However, Zhou maintains that cooperation with foreign companies is a natural need for Three Gun, given the increasingly open market after China's entry into the World Trade Organization.

"Three Gun expects to draw global players to cooperate in terms of funding, management and sales channels," said Zhou.

Foreign companies are being encouraged to invest in the 303 million yuan (US.5 million) fabric production base that Three Gun set up in the city's Pudong District last year, according to Zhou.

The company has already established cooperative relationships with foreign companies including DuPont, Dow Corning, Lacoste and Mizuno, although they mainly focus on technology and fabric processing.

Revealing that Three Gun is also in talks with several other foreign companies to discuss cooperation matters, Zhou even hinted that foreign companies would have a chance to take a major share in Three Gun, becoming its holding company.

"We will pay more attention to feasible proposals that might benefit the company (Three Gun) in the long run," she said.

One of China's leading knitted underwear producers, Three Gun occupies around 25 percent of the domestic market and it also expects to become a key high-end fabric provider throughout China with its production base in Pudong.

Lu Yong, a spokesman for Shanghai Textile Holding (Group) Corp, Shanghai Dragon's holding parent company, said Three Gun's move indicates the local textile industry's readiness to attract overseas investors.

We will take whatever measures needed in order to diversify the industry's overall investment structure and sustain its long-term healthy growth, Lu said.

Source: China Daily