Divestment of Xinjiang White Field Farming Co. Ltd.
On April 29, 2020, Esquel Group completed the divestment of its stake in Xinjiang White Field Cotton Farming Co. Ltd. (“White Field”).
Esquel Group became a minority shareholder in White Field, a joint venture company established in 1998 with the Third Division of the Xinjiang Production and Construction Corps (“XPCC”). Esquel formed this joint venture with an objective to attain high quality cotton, known as Extra Long Staple (ELS) cotton, in Xinjiang. The joint venture signed a leasing agreement on about 5,600 acres of cotton farmland in Makati county, Kashgar of Xinjiang, and sub-leased to individual farmers where they grew cotton and sold to White Field at market price.
Following XPCC’s change of policy direction and the expiration of the leasing agreement in early 2019, the land plots leased by White Field were allocated to the individual farmers to continue growing their crops. Correspondingly, Esquel and XPCC agreed in September 2019 that Esquel would sell its stake in the joint venture and end the partnership. This process was completed on April 29, 2020.