The agreement effectively closes the gap in terms of the required capital for Sephaku Cement to be fully prepared for market entry and to become a significant competitor in wholesale and retail cement trade.

Of the total debt capital raised by Sephaku Cement, just over 50% of total procurement spend will be invested locally. In addition, the combined plants will create direct employment opportunity for around 400 local people and up to 3,000 jobs indirectly.

Sephaku recently awarded a R2.3-billion turnkey contract to a Chinese contractor to build the plants, which it said saved it 25% on development costs.