China Firms Plan Cameroon Cement, Fertiliser Plant

CGC is involved in a number of industrial construction projects including building Ethiopia`s first glass factory earlier this year.

Chinese companies plan to build a fertiliser plant and a cement factory in Cameroon worth a combined 170 billion CFA francs ($334.3 million), authorities in the central African country said on Thursday.

China's Overseas Construction Group Co Ltd (CGC) signed a draft agreement to build a 135 billion CFA plant using local natural gas to produce 80,000 tonnes of ammonia and 130,000 tonnes of urea per year for use in fertiliser, officials said.

"Cameroon is demonstrating a real desire to use its large reserves of natural gas," Polycarpe Ateba, a spokesman for the Ministry of Industry, Mines and Technological Development, said.

"CGC Overseas Construction Group Co is a strategic partner which has wide experience in building and operating chemical fertiliser production units," he said, adding the Chinese company would build and run the new factory.

CGC is involved in a number of industrial construction projects in Africa, including building Ethiopia's first glass factory earlier this year.

Separately, the ministry said in a statement that China Aero-Technology International Engineering Corportation (CATI-ENG) had signed a 35 billion CFA franc draft deal to build a cement factory in Cameroon and run it via a local subsidiary.

The factory will help plug a cement supply shortfall in Cameroon, which currently produces only 750,000 tonnes of cement per year, far short of demand that Industry, Mines and Technological Development Minister Badel Ndanga Ndinga estimated at around 3 million tonnes a year.

A South Korean-led consortium signed a deal in January to build a 1 million tonne-a-year cement factory in Cameroon's coastal town of Limbe by April, but the plant has yet to begin production.

The Chinese-funded fertiliser and cement factories are expected to benefit from preferential financing terms from China's Exim Bank, officials said.

"At a time when the economies of the North are in recession, when a serious financial crisis is hitting the big countries of America, Europe and Asia, reducing direct foreign investments in the South, China stands out as an exception," Ndinga said.

Cameroon, a former French colony, is the dominant economy in the six-nation central African CFA franc zone, exporting crude oil, bananas, cocoa and cotton. It also has rich deposits of bauxite, iron ore, cobalt, nickle and uranium.

The country said in July, before the global financial crisis took the shine off bullish metals prices, that it expected some $10 billion in mining investments in the coming years.