Boom time for Chinese involvement in Tanzania(2)

The signing ceremonies were witnessed by senior Tanzanian officials. [Photo / China Daily]

Many Chinese companies regard Africa as a prime destination for their overseas investments and trade.

Xu Zhiming, chairman of Zhejiang-based China Yuemei Group, says his company is enjoying 10 percent annual growth in profits in Africa.

Xu said his group, a non-government transnational company mainly in the textiles and dye industries, is already planning to set up more companies and joint ventures in Africa.

Xu is also vice-chairman of the China Africa Business Council, which has more than 500 member companies. The council was established in 2006.

According to Xu, his group plans to invest about $150 million to restructure the Tanzania-China Friendship Textile Co Ltd to import new technology and equipment to help build it into the largest modern textile company in Africa.

The company is expected to form a complete industrial chain for cotton purchasing, processing, spinning, weaving and dyeing, Xu said.

Also, Xu said his group plans to invest about $500 million in the construction of an industrial and trade park in Tanzania, which would serve as a platform for Chinese companies investing in Africa and create more job opportunities and revenue for local Tanzania people.

Xu said his group, which started investing in Africa in 2000, has now set up 16 companies there, including three in Tanzania, with a total investment of more than $370 million.

"The investment in Africa accounts for about 30 percent of my group's total assets," he said.

"Despite the poor technological conditions and low work efficiency, the vast market on the African continent, cheap labor and abundant natural resources are the major attractions for Chinese companies, particularly labor-intensive enterprises," Xu said.

"And manufacturing, mineral exploitation, finance, machinery, infrastructure, trade, textiles and dyeing are the main industries that attract Chinese companies and investors."

Xu said the Tanzania-China Business Forum will play an active role in promoting Sino-African investment and trade.

Among the major deals signed at the first Tanzania-China Business Forum in Guangzhou included the following:

Shanghai Electric Power Company and Tanzania Electric Supply Co Ltd will invest about $400 million to construct the third phase of Kinyerezi Power Project in Tanzania.

China Gezhouba Group Corp signed an MOU with the Tanzania company to jointly build Tanzania's Rumakali Hydropower Project.

Sino Hydro Resources Ltd and Mkonge Energy Systems Co Ltd signed an agreement with Tanzania Electric Supply to jointly construct the Masigira Hydropower Project in the East African nation. Construction of the project will cost $136 million.

China Railway Jianchang Engineering Co Ltd and the National Housing Corp (NHC) of Tanzania signed an MOU to finance some NHC-selected projects valued at more than $500 million. Poly Technologies Inc Ltd signed an MOU with NHC to invest $200 million in housing projects in Tanzania.

China Dalian International Economic and Technical Co-operation Group Ltd, Hydro-China Kunming Engineering Corp and Tanzania's National Development Corp agreed to establish a $136-million center of excellence on renewable energy in Tanzania to support the Singida Wind Power Project there.

China's Tebiau Electric Apparatus Stock Co Ltd and the Tanzania Electric Supply Co Ltd agreed to construct a 400kV transmission line from Dar es Salaam to Arusha. Construction of the project will cost $693 million.