China's biggest cotton mill is seeking to raise nearly two billion yuan (HK$1.88 billion) from a listing on Hong Kong's main board during the summer, according to an official newspaper. Shandong Weiqiao Textile Group has appointed BNP Peregrine as its underwriter and aims in August or September to finance an ambitious plan of spending on new equipment, the 21st Century Business Herald said. The company declined comment. Weiqiao, based in Shanghai, has assets of 6.9 billion yuan and employs 50,000 workers. Last year, the company reported profits of 490 million yuan on sales of 6.07 billion yuan, ranking it the largest producer of cotton cloth and cotton yarn in China. Its biggest shareholder is the state-owned All-China National Suppliers and Sales. It wants to raise 1.88 billion yuan from the listing - to spend on new equipment and machinery, to increase its capacity and make higher value-added goods. The firm started life as a small cotton processor in the 1950s and, in 1981, had a new boss in the form of Zhang Shiping, then 34, who is compared to Zhang Ruimin, who took over an ailing state refrigerator plant in Qingdao in the 1980s and turned it into one of China's top brands. In 1988, Mr Zhang took a gamble during a slump in the cotton textile market and invested 10 million yuan in a new mill with 10,000 spindles which started operations in 1989. Since then, it has invested 4.9 billion yuan, or an average of one-third of its annual sales in new capacity and equipment, to become the biggest cotton mill and exporter of cotton fabric in China. Last year its exports of pure cotton grey fabric and cotton yarn accounted, by volume, for 18.3 per cent and 15.6 per cent respectively of the national total. Such rapid expansion has mainly been financed by bank loans but the company's debt-asset ratio has reached 63.85 per cent, so it wants a substantial injection of capital from the market to continue its growth and become a global leader. Mr Zhang attributes his success to keeping down costs and high productivity. He said that, of his giant workforce, only 2.8 per cent did not work in production, including 0.9 per cent in management, compared with an industry average of about 19 per cent. The company uses 1,040kg of cotton for one tonne of yarn, compared with an industry average of 1,080kg. In October last year, an American jeans maker invited Mr Zhang to set up a plant in the United States to make the fabric for jeans, but he declined, saying he would have no competitive advantage there.