Chinese firms are eyeing Pakistan textile and garment sectors as a competitive destination for foreign investment after Pakistan getting the EU's GSP+ scheme status.

Masood Textile, Pakistan's one of the few vertically integrated textile plants with in-house yarn, fabric, processing, printing and knitted apparel manufacturing facilities with the company earning PKR906m (US$8.6m) profit after tax in the fiscal year 2012-13 (July-June). Their majority stake was acquired by Shandong Ruyi Technology Group of China last month at an estimated cost of US$25m.

The Shandong Ruyi group has also signed an agreement with the Punjab government to invest US$2bn to establish the Punjab Apparel Park near Lahore, and set up woven and knitted garment factories in the park.

Mian Muhammad Shahbaz Sharif, chief minister of the Punjab, said that there are huge opportunities to invest in the province's textile and garments industry. As well as Chinese companies, those from Europe, Turkey and the Middle East are also looking to invest in the park.

Incentives to attract foreign investment in the textile sector include a regulatory framework giving equal treatment to local and foreign investors, ease of remittance of royalty, technical and franchise fees, capital, profits, and dividends, duty-free imports of machinery, equipment and raw material and flexible labour laws.

Aamir Fayyaz Sheikh, chairman of the international trade committee of the All Pakistan Textile Mills Association (APTMA), told just-style that they are striving to double their textile exports from US$13bn to US$26bn per annum in the next five years. He further elaborated that the sector requires investment of at least US$1bn per annum to grow production and exports.