China's Dadi takes 20% stake in SA's Promet
CHINA's Dadi Engineering Development Group has taken a 20% stake in SA-based Promet Engineers Africa for an undisclosed sum to get involved in mining and infrastructure projects in Africa.
The merged entity, Promet Dadi Africa, now has lump-sum turnkey project capabilities of up to $300m in respect of engineering, procurement and construction. This includes mine development, and port, process, plant and materials handling.
But more than that, it reflects the blossoming relationship between China and SA.
"Now we have merged with Promet we will do business in the African market," Dadi chairman Dongpin Wang said yesterday.
"The (merger) is a symbol of our successful business co-operation," Jiang Wei, economic and commercial counsellor of the Chinese e mbassy in SA, said yesterday.
He said SA and China's "strong political ties" had laid the foundation for the deal.
China is now SA's biggest trading partner at more than R100bn a year, with increasing emphasis on hi-tech imports from China and agricultural exports from SA.
"Now both nations are members of Brics (Brazil, Russia, India, China, SA) we should firmly promote our bilateral trade," Mr Wei said.
He said China wanted to make the most of SA's financial markets and commodities base for its growth, and that the rapidly developing relationship would serve as a paradigm for China's relations with other African states.
"Interestingly, our first project (after) the merger was a study for an American coal company looking to invest in China," Rob Bennett, MD of the new company, said yesterday.
"We are also pleased that this transaction provides a portal for South African capabilities into markets historically closed to us."
The Chinese have the world's largest foreign exchange reserves, valued at more than $3-trillion, or about equal to the gross domestic product of some of the world's most developed economies.
China's investments in SA exceeded $7bn, mostly in mining, manufacturing and the financial sector, Mr Wei said.
"We need to get used to this new force," Martyn Davies, CEO of emerging markets consultancy Frontier Advisory, said yesterday.
He said Africa's general economic growth trend had mirrored China's growth path since 1999, when China promulgated its broad Africa policy. But he said perceptions of Chinese investments were often negative, despite it being Africa's largest trading partner, investor and financier of infrastructure.
Promet Engineers Africa had completed about 40 projects in Africa in the past 10 years, including many for global mining companies.
The merged entities now had offices in SA, China and Australia, along with representatives in Botswana, Nigeria and Sudan.