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VENTURES AFRICA – JSE-listed cement maker, PPC, on Monday said it is set to enter the Algerian market by acquiring a 49 percent shareholding in the country’s cement maker, Hodna Cement, for an undisclosed amount.
This move will allow PPC to tap into Algeria’s commitment to major capital expenditure projects.
“The Algerian cement market is very attractive as consumption exceeds local production by approximately 3 million tons of cement per annum,” Ketso Gordhan, the CEO at PPC, said.
“Government…large scale capital spending programmes, include the $6 billion New City Hassi Messaoud project, which will see the rollout of thousands of housing units,” Gordhan continued, adding this will bolster the need for cement in Algeria.
In terms of the acquisition, PPC said the 49 percent stake in Hodna will take over management control in Hodna in keeping with PPC’s strategy of entering new markets by partnering with local firms.
Hodna will be constructing a $350 million, 2 million ton-a-year plant in the Hodna district.
Hodna is situated about 300km east of the capital, Algiers.
Algeria has about 40 million people and about 74 percent are in urban areas. According to PPC, this means there is a shortage of 225, 000 housing units that still need to be constructed to meet growing demand. But housing shortage in Algeria is projected to be almost 1.2 million units.
“We are already building cement plants in three countries; Ethiopia, Rwanda and the Democratic Republic of the Congo. This project sees us entering yet another African country and gives us confidence that by 2017, 40% of PPC revenues will be earned outside of South Africa.”