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UPDATE 1-S.Africa's PPC invests in Ethiopian cement firm
July 25, 2012 / 10:04 AM / 5 years ago

UPDATE 1-S.Africa's PPC invests in Ethiopian cement firm

* Deal is rare S.African investment into Ethiopia

* S.African builders looking elswewhere as growth slows (Adds details)

JOHANNESBURG, July 25 (Reuters) - South Africa’s Pretoria Portland Cement and a state investment body will together pay $21 million 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 $12 million in cash for a 27 percent stake in Habesha, while South Africa’s Industrial Development Corporation will pay $9 million for another 20 percent.

Habesha, which has also secured $86 million in debt finance from the Development Bank of Ethiopia, is building a $130 million 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 percent 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 percent at 24.69 rand. (Reporting by David Dolan)

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