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Johannesburg - Pretoria Portland Cement [JSE:PPC] and a
state investment body will together pay $21m for almost half of Ethiopia’s
Habesha Cement Share Company, targeting demand for infrastructure in one of
Africa’s fastest growing countries.
The deal marks a rare investment by a South African company
into Ethiopia, still a relatively closed economy.
PPC said in a statement on Wednesday it will pay $12m in
cash for a 27% stake in Habesha, while South Africa’s Industrial Development
Corporation will pay $9m for another 20%.
Habesha, which has also secured $86m in debt finance from
the Development Bank of Ethiopia, is building a $130m cement plant with an
annual capacity of 1.4 million tonnes.
The deal is PPC’s first investment in Ethiopia and east
Africa. The company has said it aims to make as much as 50% of its revenue
outside South Africa in the next few years.
Faced with slower growth and an industry-wide slump at home,
South African construction companies are increasingly looking north for growth
opportunities.
Home to 85 million people, Ethiopia is the second-most
populous country in sub-Saharan Africa.
Shares of PPC were up 0.4% at R24.69.
