Shandong Ruyi Solves Cotton Price Inversion To Seek Industrial Integration

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Hang upside down is to choose to retreat, swallow the loss, or open a new path, break the birth road? In many textile enterprises "wandering", Shandong Ruyi (002193, stock bar) technology group (hereinafter referred to as "Ruyi group (000626, stock bar)" resolutely chose the latter.

Reporters learned that Ruyi group's acquisition of the Australian cotton production base (Cubbie, hereinafter referred to as "the crow farm") has been approved by the Australian Treasury minister swan, and the Australian Treasury Department has issued the approval of the merger on its official website recently.

"If cotton prices continue to hang upside down, it will be a better choice for textile enterprises to go to sea to seek industrial integration."

On the 9 day, Sun Liwu, an analyst with Zhuo Chuang information cotton industry, told reporters in an interview with the reporter that the acquisition of excellent cotton bases abroad would be part of the agenda of some domestic textile enterprises.

The cost is about 1 billion 600 million.

According to the announcement issued by the official website of the Australian Treasury Department, Ruyi Group intends to acquire 80% of the shares of the Lempriere farm, and a wool processing enterprise in Australia will receive the remaining 20% stake.

Although the two sides did not disclose the paction price, the industry generally expects Shandong Ruyi group to pay about 1 billion 600 million yuan.

After acquiring the local Cotton Corp in 2005, the group became the largest cotton producer in Australia and even the world, playing an important role in the Australian agricultural economy.

However, in recent years, due to poor management and long-term drought, the total debt burden of more than 300 million Australian dollars in 2009 was managed by the government. The Australian government tried to finance its nationalization, but failed finally to buy it by foreign investors.

On the 3 day, Joyce, a senator from Queensland, called on the Australian people to "lobby the government to change this decision".

Joyce said that selling the farm to the Chinese enterprises was "the loss of Australia's agricultural interests, the loss of the largest water resource right and the loss of 13% cotton products in the country", and suggested that the farms be sold to the people of Australia.

Although the approval was not affected, the Australian government asked Ruyi group to reduce its shareholding power to 51% in 3 years, and directly control farm operations and international marketing by Lempriere, so as to reduce the "cheap" Chinese enterprises' acquisition of Australia.

Resource worries.

Seeking industrial integration

The cost is enormous and the resistance is not small.

In the face of such a price, Ruyi group is still committed to overseas acquisitions, and the "inside and outside cotton prices hang upside down" factor can be significant.

"Because the domestic cotton planting mechanization degree is not high, there is a big gap between the cost of cotton planting and the planting base of foreign cotton, and more powerful textile enterprises in China have been seeking the integration of industrial chain."

Sun Liwu told the reporter that Ruyi group's acquisition is also out of consideration.

According to the Chinese customs report, in the 1-7 month of this year, China's textile exports decreased by 0.2% compared with the same period last year, while the import of cotton increased 133.7% to 3 million 460 thousand tons.

In July, the price of cotton in China reached 18231 yuan per ton, compared with the import tax of only 14778 yuan per ton, including import tax.

Sun Liwu believes that domestic and foreign cotton price inversion situation is difficult to ease in the short term, coupled with domestic

Industry's dependence on foreign cotton has been increasing. It will become a trend for domestic textile enterprises to purchase cotton planting base.

"Through integration, the cost of enterprises will be controlled and the competitiveness in the international market will also increase."

Sun Liwu said that only in terms of cost, Ruyi group can save huge expenses.