Lagos — Dangote Cement and Sephaku Holdings have announced reaching a shareholders' agreement that will see the building of a 2.2 million tons cement plant in South Africa.

The deal was first announced in April this year, and saw Dangote acquiring 19.8% stake in Sephaku Cement through a private placement, proceeds of which will be used to part-finance the building of the plant.

A statement from Dangote Cement media relations consultant indicated that, the agreement that was signed in London on October 1, 2008 by the Sephaku Chairman Dr Lelau Mohuba and Dangote Chairman Alhaji Aliko Dangote lays the foundation for the relationship between Dangote Cement, Sephaku Holdings and Sephaku Cement in which Dangote Cement will eventually hold a 45 percent equity stake.

It noted that the joint venture is now in discussions with technical partners before construction commences.

Dangote Cement is part of Nigeria's largest diversified group, Dangote Industries Limited, while Sephaku Cement forms part of the industrial division of privately held Sephaku Holdings, whose interests also include mining and investment holdings.

tTe statement said the deal uses part of Dangote's expansion into the African market. "Dangote Cement is expanding its operations across Africa, with current projects in Senegal and South Africa and negotiations taking place in a number of other African countries as Dangote Cement puts in place the infrastructure necessary to achieve its target of 50 Million tons of production capacity by 2012."

Sephaku Holdings, who has 55% shareholding shall provide a majority of Sephaku Cement management and is also in advanced stage of finalizing debt funding towards the capital construction cost of the project kit noted.

The building timeline will see Sephaku Cement begin construction of the R3bilion plant in January 2009 with first cement being ready for delivery by the end of 2010.