TOKYO -- Japanese textile maker Toray Industries is in final talks to buy some 30% of Hong Kong-based Pacific Textiles' outstanding shares from major stockholders, according to sources. This will make Toray the company's top shareholder.
Toray is expected to inject around 60 billion yen ($536 million) into Pacific Textiles. By next year, Toray may increase its stake to over 50%, taking full control and making the company a subsidiary.
Toray has its own textile and sewing facilities in China and Southeast Asia. Besides developing fabrics, it is a major supplier of textiles and clothing to apparel and sportswear brands, like the Uniqlo chain of Japan's Fast Retailing.
Toray and Fast Retailing have worked together for more than 10 years. Together they have built a fabrics business worth 850 billion yen. Toray hopes to build a similar relationship with Pacific Textiles, develop new knitted materials and market them around the globe.
Pacific Textiles is the world's top supplier of knit fabric, with core strengths in knit fabric processing, dyeing and printing. It counts as its clients a number of major apparel makers, including sportswear manufacturers.
Toray hopes to leverage Pacific Textiles' customer base to build a global network, offering high-performance textiles as well as processing and sewing services. Pacific Textiles will be a key affiliate within the Toray group and play a crucial role in the group's expansion plans.
The Hong Kong-listed company's year to March sales totaled HK$5,993 million($767 million) with a net profit of HK$989 million.