(Yicai Global) Dec. 8 -- Sunrise Garment Group, a Chinese maker of home textiles and sleepwear, plans to acquire a large cotton farm in Australia for AUD121 million (USD81 million) to stabilize its raw material costs.

Sunrise's unit Ausuntech and its subsidiary will use their own funds and bank loans to purchase Gundaline Station from Dutch investor Optifarm, the Zhejiang province-based manufacturer said in a statement yesterday.

The nearly 15,000-hectare Gundaline Station is one of the largest local cotton farms in New South Wales. It can produce about 7,000 tons of cotton per year.

Australia's foreign investment authorities have yet to approve the deal but if they do, it should close by March 2023. The change of ownership would not cause lost jobs in farm management.

Since last year, prices of cotton, Sunrise’s main raw material, have majorly fluctuated so the company has been looking for a suitable raw material base, it said. Gundaline Station can provide Sunrise with a traceable supply of raw materials of stable quality and controllable costs.

Cotton trade between China and Australia stopped in 2020 amid decreasing collaboration even though before that China used to buy a lot of the staple fiber from the continent in Oceania. In 2019, China purchased more than CNY4.3 billion (USD617 million) of cotton from Australia.

Sunrise’s stock price [SHA: 605138] closed 0.5 percent down at CNY12.40 (USD1.80).

Editor: Emmi Laine, Xiao Yi