Chinese textile firm Shandong Ruyi Technology Group plans to acquire a majority stake in Masood Textile Mills, one of the few vertically integrated textile and apparel makers in Pakistan.

According to an announcement on the Karachi Stock Exchange, the Chinese firm intends to buy 31.2m shares in Masood Textile Mills (MTM) - which would give it a 52% stake in the company.

MTM operates in-house yarn, knitting, fabric dyeing, processing, laundry and apparel manufacturing facilities, with 85% of production exported to the US and the remaining 15% destined for Europe.

The company has an monthly production capacity of 120,000 dozen polo, rugby and Henley shirts along with basic garments like crew neck T-shirts, sweatshirts, boxer shorts and bikinis.

Shandong Ruyi Group, meanwhile is one of China's top textile and clothing enterprises, with total assets of CNY5.5bn (US$906m) and nearly 20,000 employees.

Its business interests include cotton textiles, printing and dyeing, knitting and jeans, and last year led a consortium that bought Cubbie Group, Australia's largest cotton producer.

The investment coincides with the European Union last week granting Pakistan GSP+ status from 1 January 2014 - which removes all tariffs on products exported to the EU.

The Pakistani textile industry estimates that exports to the EU of textiles and clothing alone under GSP+ will increase by US$650m in the first year.