China's largest cotton textile producer, Weiqiao Textile, will spend 4.3 billion yuan this year and next to raise its production capacity while remaining on the prowl for acquisitions. The Hong Kong-listed firm plans to lift annual production capacity of cotton yarn by 50 per cent to 486,000 tonnes and grey fabric by 70 per cent to 995 million square metres this year. Grey fabric accounted for half of Weiqiao's revenue in the first half while cotton yarn provided 36.6 per cent. The firm's objective is to double 2003's overall capacity by next year. 'The group will seek suitable acquisition opportunities to capture greater market share,' chairman Zhang Bo said. 'It aims to become the largest cotton textile manufacturer in the world.' Weiqiao would benefit from the lifting of global textile quotas next year, which would raise demand for Chinese textiles, Mr Zhang said. Although increased cotton prices and persistent power shortages hurt many mainland textile firms during the first half, Weiqiao reported a 76 per cent surge in revenue to 4.48 billion yuan and a 50 per cent rise in net profit to 357 million yuan, beating expectations. Weiqiao gained market share as rising raw material prices and operating costs forced some smaller mainland manufacturers to suspend operations, Kim Eng said. Weiqiao's output of cotton yarn and grey fabric grew 69.4 per cent and 102.7 per cent respectively in the first half. However, its gross margin fell to 18.2 per cent from 20.4 per cent a year ago, due to rising cotton prices. Cotton accounts for 70 per cent of its production costs.