Source AP ©

Orascom acquires stake in North Korean state-owned firm

Egypt's Orascom Construction Industries has signed a deal with North Korea's state-owned Pyongyang Myongdang Trading Corp. to acquire a 50 percent stake in Sangwon Cement for US$115 million (EUR83 million).

Sangwon Cement owns and operates a cement plant near the capital Pyongyang.

The plant, originally supplied by German equipment supplier KHD, has two dry-process production lines with a combined capacity of 2.5 million tons a year, Orascom said in a statement.

The acquisition will take the form of a capital increase which will be used to modernize and upgrade the plant's capacity to 3 million tons a year, the Egyptian firm said.

The agreement also includes mining operations related to cement production including limestone quarries, a coal mine and a gypsum quarry.

The deal involves a hydroelectric power station near the plant, which has its own railway link to the national grid connecting the plant to the Port of Nampo, the statement said.

Technical proposals for the upgrade of Sangwom cement plant are currently being prepared by F.L Smidth, Polysius and KHD, Orascom said.

"Our investment in cement marks the beginning of a variety of investments including the potential establishment of an economic trade zone in the northern part of the country," said Orascom's Chief Executive Nassef Sawiris.

"We are also exploring opportunities in the mining and power sectors," he added.