GWERU, October 19 (The Source) – Sino Zimbabwe Cement Company (SZCC) says it has roped in a new investor to finance the construction of its $50 million brick and tile plant after its shareholders failed to raise funds for the project.
SZCC is a joint venture between the Zimbabwe government’s Industrial Development Corporation, which has a 35 percent stake, and the Chinese government through the China Building Materials Corporation (CBMC), which controls 65 percent.
Last year the Chinese had pledged to fund the project but have stalled on the undertaking, citing a slow-down in the Chinese economy.
SZCC managing director Wang Yong told The Source that the deal with the new investor is expected to be finalised by November.
“We had projected that our Chinese shareholders would inject funds for the (brick and tile) project but the conditions in China could not give room for funds to be injected into the project. So the board gave us the greenlight to look for a partner to come on board and fund the project and we have already identified a Chinese investor with a company registered in Mauritius who is interested in the project,” said Wang.
“The final agreement with the new investor, which I cannot disclose at the moment because of a non-disclosure agreement will be finalised at the end of this month and construction of the project will be begin.”
Should the deal sail through, the current shareholding structure of the brick and tile plant is expected to be diluted with the new investor assuming a controlling stake in the plant.
“Subject to finalisation of the transaction they are likely to take at least 50 percent of the stake in the new plant. We have spoken to the Minister of Industry and Commerce (Mike Bimha) about the deal and he has given it the greenlight of such an arrangement since it does not infringe on the indigenisation and empowerment laws since this is a non resource driven project,” he said.
Zimbabwe’s local ownership laws require companies in the resources sector to give locals a controlling stake of at least 51 percent.
Initially, the project was supposed to have kicked off early this year, with completion set for year end.