Wiphold seals cement deal with Chinese firm

Women Investment Portfolio Holdings Limited , a black women-owned company, and Continental Cement , a South African limestone mining company, will embark on a joint venture with China's Jidong Development Group, and the China-Africa Development Fund to construct a cement manufacturing plant.

Women Investment Portfolio Holdings Limited , a black women-owned company, and Continental Cement , a South African limestone mining company, will embark on a joint venture with China's Jidong Development Group, and the China-Africa Development Fund to construct a cement manufacturing plant.

"This represents a significant foreign direct investment into the South African cement industry, with an inflow of more than R800million foreign direct investment from China, of which 45percent will be equity investment, with the remaining 55percent in the form of commercial debt," Wiphold said.

Nedbank Capital had been appointed as lead arranger for the transaction.

Jidong and the CADFund, would be the majority shareholder in the joint venture, holding 51percent.

Wiphold would hold 23,9percent in the joint venture, with the remaining 25,1percent held by Conticem.

"The project, which will inject at least R1,65billion 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," Gloria Serobe, chief executive of Wipcapital, a financial services subsidiary of Wiphold, said.

The new plant, which would be located 85km north of Brits and adjacent to Conticem's limestone deposits, would be designed to initially produce 2500 tons of pure Ordinary Portland Cement a day, with the capacity to significantly increase production, according to market demand.

Jidong would both build and operate the plant, which would be based on the best technology available.

Jidong chairperson Zhang Zengguang said: "We have significant experience in the developed and highly competitive Asian markets, where we have built plants that have added substantial capacity to the Asian cement industry.

"We are pleased that we will be able to transfer our knowledge, skills, best practices and efficiencies to South Africa."

According to CADFund's chief executive Chi Jianxin the deal underlined the growing links between South Africa and China - and an increasing appetite for South African and Chinese institutions to provide export credit and debt finance.

Conticem CEO Anton Weavind said all the necessary environmental and social impact studies had been successfully concluded for the project.

The joint venture consortium expected to distribute most of the cement to the regional market in Gauteng. - Sapa

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