Johannesburg — BATEMAN Engineering, the South African company that listed in London about six months ago, had secured a strategic contract in China in a move marking its entry into that country, it said on Friday.

The contract, to supply engineering services for a new titanium slag-smelting plant in Yunnan province, was awarded by Yunnan Xinli, a subsidiary of Shanghai-listed China Yunnan Metallurgical Group (CYMG), which is one of the 500 largest companies in China.

The contract was small at $4m, but Bateman, which was previously listed in SA and which supplies engineering services and equipment mainly to the mining industry, said it hoped the move would open other opportunities in China, particularly with CYMG. The parent group was active in a wide range of resources, it said.

Bateman CE Sivi Gounden, former public enterprises director-general in SA, said on Friday that China presented "enormous opportunities for further growth".

Gounden said Bateman had a two-pronged China strategy, which saw it seeking to sell its services in China while sourcing components for equipment from that country.

China and India had rapidly caught up and were now producing components for the global resources sector on a par with western standards, said Gounden. China was one of the key global growth areas for Bateman, along with India and sub-Saharan Africa, he said.

The company recently opened an office in Beijing. Bateman had been studying the Chinese market and positioning itself to enter that market for about a year, said Gounden. Yunnan Xinli had approached Bateman, however.

The foray into China advances Bateman's expansion strategy. The group is also considering acquisition opportunities in other parts of the world.

The group made its first acquisition, after listing on London's Alternative Investment Market, in October, taking control of the mainly SA-based Atoll group. Bateman's aim to expand had been one of the primary drivers behind the listing.

Bateman said in March, in its first set of results after the listing, that pretax profit had doubled to $6m in the six months to December compared with the corresponding period a year earlier.

Bateman was benefiting from "boom conditions" in the global commodities market.

Revenue increased 46% to $155m in the period under review, and Gounden said at the time that there was substantial scope for the business to grow.

Bateman's shares closed unchanged on the London Stock Exchange at 386,50p on Friday, giving the group a market capitalisation of £138,03m.