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By Ouyang Shijia | China Daily | Updated:2017-03-31 08:23A China Gezhouba Group Co Ltd subsidiary plans to purchase a 100 percent stake of a Brazilian water supply company, in a bid to expand its investment in local public-private partnership projects and to improve its presence in the local market.
The Chinese construction conglomerate announced on Thursday that its subsidiary-China Gezhouba Group Overseas Investment Co Ltd-will spend up to $200 million to acquire Sistema Produtor Sao Lourenco.
After the acquisition of the Brazilian utility company, CGGC said it would also be able to acquire the operational rights of the water supply program in Sao Paulo state.
According to the Sao Paulo state governments official website, once completed, the water system will be able to serve 1.5 million local residents.
The company reported on Thursday that its 2016 revenue amounted to 100.2 billion yuan ($14.55 billion), an increase of 21 percent year-on-year. Its net profit reached 3.4 billion yuan, growing 26 percent year-on-year.
Joseph Jacobelli, a senior analyst of Asian utilities and infrastructure at Bloomberg Intelligence, said acquiring SPSL will help CGGC better export its technology to Brazil and will contribute to its earnings.
“Now a lot of Chinese companies, such as CGGC, are expanding their overseas business, which will help them export Chinese know-how and find new markets,” he said.
In 2013, SPSL signed a deal with Sabesp, a Brazilian water and waste management company owned by Sao Paulo state. Under the agreement, SPSL planned to build and maintain the local water supply and sludge treatment, earning the rights to operate the system for 25 years.
Having started in April 2014, the project is scheduled to be completed in February 2018 and will come into commercial use by August 2018, CGGC said in a statement.
The company planned last year to buy infrastructure assets in Brazil, through concessions, partnerships or construction projects.
“Our focus is not only on renewable energy, we are also considering Brazils sanitation and logistics sectors amongst other areas,” Lucas Fan, general manager for Brazil of CGGC, said in an interview with the Sao Paulo Times.
Tang Kaiqian, president of the Brazil-China Chamber of Commerce and Industry, said in a local event in Sao Paulo: “Due to the economic and political crisis, the Brazilian assets were valued at a lower price.”
Tang added that more Chinese enterprises were targeting the Brazilian market.
Zheng Xin contributed to this story.Related StoriesCGGC plugs into project in PakistanChinese investments pour into London propertyMaking group investment viableTop 10 most powerful national economiesChinese utility buys big in BrazilPhotoLove in leather makingTop 10 most valuable brands in ChinaHeadmaster Jack Ma greets new students at Hupan CollegeMotorcycles dazzle at exhibition in TokyoQuotable quotes at Boao ForumLama living on plateau keen on online shoppingMost Viewed in 24 HoursTop 10Worlds top 10 most valuable automobile brands in 2017Editors picksGovt mulls new steps in robotics industryJD Finance speeds up privatization, eyes A-share marketChina DataChina Monthly Economic Data: Jan-FebQ&A With CEORiding opportunities in huge unmet needsRiding the wave of consumption-led growthSpecialBoao Forum for Asia Annual Conference 2017China Development Forum 2017BACK TO THE TOPHOMECHINAWORLDBUSINESSLIFESTYLECULTURETRAVELWATCHTHISSPORTSOPINIONREGIONALFORUMNEWSPAPERChina Daily PDFChina Daily E-paperMOBILECopyright 1995 -var oTime = new Date();
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