State Engineering Firms Land $1.68 Billion in Overseas Projects
* China CAMC Engineering Co. Ltd. will build a $1.2 billion steel plant in Azerbaijan, while Sinoma International Engineering Co. Ltd. will construct a $480 million cement plant in Zambia
* Chinese companies last year began looking at overseas projects to prop up demand after Beijing reined in local governments’ debt-fueled infrastructure spending — a policy the central government has since reversed
(Beijing) — Two state-owned engineering firms announced Thursday that they had signed deals for projects worth a combined $1.68 billion as the sector turns its sights overseas to offset sluggish demand at home.
China CAMC Engineering Co. Ltd. has won a $1.2 billion deal to build a steel plant in Azerbaijan, while Sinoma International Engineering Co. Ltd. bagged a $480 million deal to build a cement plant in Zambia.
Chinese companies began increasingly looking at overseas projects to prop up demand after Beijing reined in debt-fueled infrastructure spending by local governments late last year, leading to the cancellation of a handful of ambitious infrastructure projects that were deemed economically unsound.
However the central government made a U-turn in late July, giving stalled projects the green light to continue and also encouraging the private sector to contribute to the sector’s growth. This came after official data showed that China’s infrastructure spending growth fell to a record low of 4.2% year-on-year from January to August.
CAMC said in a filing (link in Chinese) to the Shenzhen Stock Exchange that its new project in the Azerbaijani city of Ganja will help it “expand business, and increase influence in the countries along the Belt and Road Initiative.”
CAMC will help Baku Steel Co. LLC, the largest metallurgical company in the Caucasus region, build the Azerbaijan Integrated Steel Mill Complex, a project that the filing estimates will take over three years to complete. The steel plant is expected to have an annual output of 1.3 million metric tons (1.43 U.S. tons) of reduced iron and 700,000 metric tons of iron sheets.
The project will contribute significantly to CAMC’s top line over the next few years as the deal value equals nearly 75% of its total revenue last year, it said in the filing.
Meanwhile, Sinoma is set to build a cement plant for Central African Cement Co. Ltd. in Zambia. Construction will last for three years, and the deal value represents 17% of Sinoma’s total revenue last year, it said in a filing (link in Chinese) to the Shanghai Stock Exchange.
Contact reporter Jason Tan (email@example.com)
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