Chinese state manufacturer FAW is to build an assembly plant in Algeria producing 10,000 vehicles per year under an agreement signed with Arcofina, the private Algerian firm Arcofina said.
The agreement provides for an initial investment of five billion dinars (HK$473 million), and Arcofina CEO Abdelouahab Rahim said that the figure will rise.
To conform with Algerian law, Arcofina will own 51 per cent of the plant and FAW 49 per cent, with the aim of reducing the Chinese manufacturer’s share to 40 per cent after three years, Rahim said at the signing of the protocol.
He said it was an opportunity that “there are two manufacturers setting up at the same time” in Algeria, referring to Renault which in September began construction of a car plant in the western region of Oran.
Renault had asked for a production monopoly in the country for at least three years, which was rejected.
Launched in 1953, FAW employs 130,000 people worldwide producing buses, cars and lorries.