LINGWU, Ningxia - Cashmere fiber exporter Ningxia Zhongyin Cashmere Co plans to acquire more international brands over the next five years, Chairman Ma Shengguo said on Friday.
"We are actively looking for buying opportunities in the European market, as it has top brands with the history and pedigree that appeals to Chinese consumers," Ma said.
The Ningxia-based company recently took over the 140-year-old British yarn mill Todd & Duncan for around $9.47 million, helping it expand into the lucrative top-end cashmere market in both China and abroad.
With China Export and Import Bank's 47 million yuan financial support, Zhongyin Cashmere completed the acquisition in late 2009. The Kinross-based Todd & Duncan was owned by Dawson International and ran into financial problems due to dwindling market demand during the global financial crisis.
"Todd & Duncan has always been a role model for us to learn from. It is the financial crisis that provided us with an opportunity for the takeover," Ma said.
"Through the acquisition, the company gained the world's top brand and its sales channel. More importantly, we also learnt state-of-the-art expertise in cashmere processing," he said.
During the past five years, Zhongyin has been the biggest fiber supplier for Todd & Duncan, which supplies yarn to leading fashion houses like Gucci, Prada and Chanel.
China is now the largest cashmere producer in the world, accounting for 70 percent of the total world cashmere output. However, very few Chinese cashmere companies have a presence in the premium quality cashmere market.
Zhongyin Cashmere is a typical example of how Chinese companies are seeking to move beyond raw cashmere output to the much lucrative finished product sector.
Though 90 percent of Zhongyin's products are sold in the overseas markets, most of it is raw cashmere and original brand manufacturing products. Ma said it is essential to own a world-famous designer brand to change the current scenario.
"Overseas acquisitions will help us become a top-end fabric cashmere knitwear producer, and expand our reach in the domestic market," he said.
Cashmere industry has become a major contributor to the economic growth of the relatively underdeveloped Ningxia Hui autonomous region in western China.
"We should increase lending to local pillar enterprises as it will help make them more competitive globally," said Sun Junjing, president of China Export and Import Bank's Shaanxi branch.