Renault, Algeria to sign deal on new plant in August

21st June 2012, Comments 0 comments

Algeria and French automaker Renault plan to sign an agreement in August that will clear the way for them to build a factory in the north African country, a minister said Thursday.

The announcement by Industry Minister Mohamed Benmeradi follows two years of negotiations to build cars for the Algerian market at a new plant in the west of the country.

"Our teams have been working on finalising the shareholders' alliance since May 25, and it will probably be ready by early August," Benmeradi said on national radio.

He said the shareholders' alliance would within two to three months establish a joint venture between the Algerian government and the automaker, but that building work for the factory could begin sooner.

Renault signed a framework agreement with Algeria on May 25, but the two have still been hammering out the final details of the deal.

Neither side has given financial details on the plans, saying negotiations are ongoing.

The talks have reportedly snagged over the question of location, with Algerian officials pushing the Mediterranean port of Jijel, 350 kilometres (200 miles) east of Algiers, to boost regional development.

The French group is said to prefer a site in the suburbs of Algiers because it would be easier to find qualified workers near the capital.

Benmeradi said Thursday the government had proposed two new sites, Oran and Mostaganem, both port cities in the west of the country.

© 2012 AFP

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