The Competition Commission of Pakistan (CCP) has approved the acquisition of specific assets, including land, equipment, and machinery, from Crescent Cotton Mills Limited (PSX: CCML) by Sultan Spinning Industries (Private) Limited (SSIL). The transaction is seen as a positive step toward fostering competition in Pakistan’s yarn market.
Crescent Cotton Mills Limited (CCML), a publicly listed entity, is a prominent player in the yarn industry, primarily producing cotton and blended yarn for various textile applications. The company has been operational for decades, contributing significantly to Pakistan’s textile exports. However, the sale of these assets indicates a strategic shift in its operations.
On the other hand, Sultan Spinning Industries (SSIL) is a private company newly incorporated under Pakistani law. While SSIL has not yet commenced operations, its entry into the market is expected to invigorate competition by introducing fresh capacity and innovation in the production and sale of yarn.
The CCP identified the relevant market as “yarn,” segmenting it into cotton, synthetic, and blended yarn categories based on production processes, pricing, and consumer preferences. CCML, with its minimal market share, is anticipated to play an even smaller role post-transaction as the transferred assets will no longer contribute to its operations.
In contrast, SSIL’s entry is projected to enhance competition by adding a new player to the yarn industry. This is expected to drive competitive pricing, product innovation, and better availability, ultimately benefiting consumers and strengthening the market’s overall dynamics.
The CCP’s Phase I assessment found that the transaction does not risk reducing market competition. Instead, it ensures fair competition by transferring assets without consolidating market share. The move also avoids creating additional barriers for potential new entrants in the sector.
