Global Investment House, the Kuwait sovereign wealth investment firm, has signed an agreement with Bina Holding of Tunisia to jointly develop Carthage Cement, a planned cement plant in Tunis.
The acquisition includes one of the largest quarries in North Africa, spread across 220 hectares, of which 30 hectares are presently excavated and already into gravel production and generating revenues. The quarry, with estimated limestone deposits of 250 million tons, is located close to the capital and main commercial port of Tunis.
PEG of Switzerland is the project manager and HSBC is the advisor to the project.
Cement is becoming an increasingly valuable commodity in North Africa, and property purchases and industrial development connected to cement may be attractive to investors. In the Maghreb region, which includes Morocco, Algeria, Tunisia and Libya, the building materials sector is experiencing a boom as these emerging markets are becoming urbanized. The unprecedented growth in the area, driven by urban and demographic development as well as the flow of foreign direct investments, has driven cement consumption in Tunisia from 4.2 millions tons in 1998 to over 7.0 millions tons in 2007, according to figures from GIH. Production of cement in Tunisia has multiplied 13 fold during the last 30 years growing from 500,000 tons a year in 1976 to reach almost 7 million tons in 2007. Four cement producers are responsible for 75 percent of Tunisian production, while the remaining 25 percent are produced by two public companies plants.
The news comes just a few weeks after GIH launched its Global GCC Real Estate Fund II, a $500 million (€318 million) vehicle focused on investments in the Gulf Cooperation Council (GCC) region. The fund is the Kuwait-based investment firm’s second property vehicle targeting the GCC region. That fund expects to generate a gross return of around 25 percent.