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China invests in large South African cement plant

05-14-2010 15:32 BJT

JOHANNESBURG, May 13 (Xinhua) -- Leading South African investment company Women Investment Portfolio Holdings (Wiphold) said on Thursday that it has signed a 1,65 billion rand (220, 000 million U.S. dollar) deal with a Chinese consortium to build a new cement plant in South Africa's Limpopo Province.

Jidong Development Group of China will build the cement plant along with Continental Cement of South Africa, while the China African Development (CAD) Fund will provide most of the capital required, Business Day newspaper in South Africa said on Thursday.

In an emailed statement to media, Wiphold said the deal represents a significant foreign direct investment into the South African cement industry.

Wiphold projected an inflow of more than 800 million rands (106.6 million dollar) foreign direct investment from China. It said 45 percent of this will be equity investment, with the remaining 55 percent in the form of commercial debt. South Africa's Nedbank Capital had been appointed as lead arranger for the transaction.

Jidong and the CADFund would hold the majority of shares in the joint venture at 51 percent, while Wiphold would get 23.9 percent and Conticem 25.1 percent.

"The project, which will inject at least R1.65 billion of investment into the South African economy over the next two years, will significantly increase South Africa's cement production capacity, while also contributing to economic activity and job creation in Limpopo, one of the poorest provinces in the country," said Gloria Serobe, chief executive of Wipcapital, a financial services subsidiary of Wiphold.

The new plant would be located 85 km north of Brits and adjacent to Conticem's limestone deposits.

It would be designed to produce 2,500 tons of pure ordinary Portland cement per day initially, with the capacity to significantly increase production, according to market demand.

Editor:Zhang Jingya |Source: Xinhua

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