Two South African companies, Pretoria Portland Cement (PPC) Co Ltd and Industrial Development Corporation (IDC), acquired a combined 47pc of shares in Habesha Cement SC (HCSCo) for 21 million dollars.
PPC acquired a 27pc share for chanel handbags 12 million dollars, while IDC, a development finance institution owned by the government of South Africa, invested nine million dollars for 20pc of the company.
Habesha, gucci outlet which has a subscribed capital of 750 burberry outlet million Br, has managed to collect 690 million Br, including about 370 million Br from PPC and IDC. Habesha expects to collect 60 million Br more from local shareholders by December 2012, according to Mesfin Abi, CEO of HCSCo.
Habesha plans to construct a cement plant on 30ha of land in Holeta, 35km, west of Addis Abeba in Oromia Regional State, at a cost of 130 million dollars.
Habesha has secured an 86 million-dollar loan from the Development Bank of Ethiopia (DBE). Its first attempt was derailed as a result of the devaluation of the Birr against foreign currencies by 20pc in September 2010, which required more Birr than had been deposited in a closed account for 30pc of the project. The 30pc that the DBE required escalated to 655 million Br as a result of the 20pc devaluation.
Chinese Northern Heavy Machinery Industries (NHI) Shenyang Co Ltd was then awarded the construction contract for the factory. Habesha has already paid an advance of 7.9 million dollars, 10pc of the contract, to NHI.
"We have approved the design made by NHI and are in the early stages of construction, with the site clearing and levelling completed," Mesfin told Fortune.
The factory is expected to begin production in the early half of 2014 with a capacity of 1.4 chanel bags million tonnes of cement per annum.
The deal between Habesha, PPC, and IDC was arranged by Infra Group, which provided transaction advisory services for the three stakeholders. Infra Group, a consultancy formed in the UK 12 years ago, which mostly works in infrastructure development and engineering, presented the business idea and business opportunities of Habesha to the South Africans.
Before the deal was signed, PPC had hired Ernst & Young (EY) to conduct an assessment of the feasibility of Habesha's project and the cement sector in Ethiopia.
The assessment proved that Habesha Cement's project was an investment worth getting into, as it was well planned and managed, Paul Stuiver, CEO of PPC, told Fortune.
PPC, established in 1892 as South Africa's first cement plant, burberry sale currently has eight cement manufacturing facilities and three milling depots in South Africa, Botswana, and Zimbabwe. The company has a capacity to produce around eight million tonnes of cement products a year.
It grossed revenue of 6.8 billion dollars in 2011.
PPC's investment in Habesha cement is part of its strategy to expand the company's sphere of influence from predominantly Southern Africa to the whole continent of Africa, raising revenue from the rest of Africa to between 40pc and 50pc of total earnings, according to Stuiver. It is PPC's first investment in Ethiopia and even East Africa.
PPC will offer Habesha operational and technical expertise during the initial construction of the factories.
Habesha will also get access to the PPC Academy, which will train the plant personnel of Habesha in South Africa. PPC has five academies in sales and marketing, operations (cement manufacturing), mining, technical skills, leadership, and management.