JPMorgan Asset Management has invested about 15% of its US$860m Asian infrastructure fund to establish a joint venture cement manufacturer in the southwestern province of Guizhou.
Established by JPM in 2007, Hong Kong-based Scitus Cement (China) Holdings Limited invested in building a number of dry-process lines in Guizhou, Sichuan and other places. The planned total investment value amounted to over RMB4bn before the end of 2009, reaching the targeted cement production capacity of over 10 million tons.
The company’s first investment project, Guizhou Zunyi SCITUS Cement Co. Ltd, or "Zunyi-Scitus Nissan 2,500-ton clinker cement energy-saving new production line", located in the territory of Shenxi Town in Zunyi City, started on 18 April 2008. After completion of the new line, the annual sale of cement is expected to be 1.1Mt, with an average annual turnover (excluding tax) of RMB 300 million.
On 18 April 2008, Scitus Cement (Guizhou) Management Co. Ltd was established to employ efficient integrated group management of the Guiyang SCITUS New Line, which plans to start the construction of another 4 Nissan new energy-saving cement production lines to produce more than 2,500 tons each.
Scitus Cement (Guizhou) is a joint venture between Sicitus Cement (China) and Xishui County Construction Material Industrial Co. Ltd, Sicitus Cement (China) takes a 90% stake in the joint venture, injecting RMB 90 million (US$ 13.176 million) into it. The Chinese partner contributes 10%. The joint venture will borrow RMB 200 million (US$29.28 million) from the Bank of Communications to meet its registered capital size of RMB3300m, according to a Guizhou government announcement.