Property fund

Invesco plans to launch a $300 million property fund to funnel investment into China and Japan at a time when Asia's climbing property prices and a hunger for new homes are drawing ever-larger pools of capital.

Invesco, a unit of Anglo-US fund manager Amvescap, hoped to create the fund in this first half using borrowing for individual projects to crank up spending power to between $800 million and $900 million.

The 7-year closed-end fund will be Invesco's the first direct property investment in Asia. It has nearly $20 billion in assets under management in similar North American and European funds and an $800 million global property securities fund.

Engine plant

Great Wall Motor Co Ltd, China's biggest sports utility and pickup truck manufacturer, plans to invest 2 billion yuan to build a new engine plant in China. The move is part of a concerted push to roll out more passenger cars and break into US and Western markets.

The plant, located in Baoding in North China's Hebei Province, will produce 0.8-liter to 2.0-liter small-sized engines, including a 1.2-liter diesel engine to supply its upcoming passenger cars, a company official said last week.

It will have an annual capacity of 200,000 units for the first phase, and final capacity will reach 400,000 by 2008. All the investment will be self-funded.

Deepwater project

China National Offshore Oil Corp (CNOOC), the nation's largest offshore oil producer, plans to invest 10 billion yuan on deepwater exploration equipment over the next few years, the China Business Times reports.

The company will complete the construction of China's first homemade deep-sea oil drilling vessel in 2010.

CNOOC will bring five new deepwater exploration projects online this year, with projected spending of $3.65 billion.

The company said earlier that it plans to conduct more drilling and other exploration activity in offshore China in 2007, particularly in Bohai Bay and the South China Sea.

Overseas expansion

China's Zijin Tongguan Investment Development Co said last week that it will acquire a London-based resource development company in a bid to expand its overseas copper mining activities.

Fujian-based Zijin Tongguan will purchase a 70 percent stake in Monterrico Metals Plc for 1.4 billion yuan, according to an announcement on the Zijin Mining Group website. The Zijin Mining Group is Zijin Tongguan's largest shareholder. Zijin Mining Group, Tongling Nonferrous Metals Inc and Xiamen C D Inc hold 45 percent, 35 percent and 20 percent stakes respectively in Zijin Tongguan.

Monterrico operates exclusively in Peru, where it owns the $700 million Rio Blanco copper-molybdenum project, which has 731 million tons of copper concentrate reserves.

Pet food

Swiss-based Nestle SA's pet food plant in Tianjin began operating recently.

Nestle invested 80 million yuan in the plant, which has an annual production ability of 20,000 tons. It is the company's first pet food plant in China. The plant will use locally purchased raw materials, including beans, corn and wheat. Its products will be sold in supermarkets, pet clinics and pet shops.

According to statistics from the China Food Association, the value of pet-food sale in China is expected to reach 6 billion yuan in 2008, and the figure will exceed 15 billion yuan in five years.

Pilot project

Huayi Group plans to invest about 100 million yuan in a pilot project to manufacture a medicine for diabetics that it developed through its own research.

The board has approved the project, which will be launched in the third quarter of this year. A plant to make the medicine will be located in Shanghai's Nanhui International Medical Science Park.

The new drug, named Yishengtai, is China's first effort in developing drugs for diabetics using its own intellectual property rights. The company said the medicine will be put into production in two years if things go smoothly.

Russia contract

China Coal Overseas Development Co Ltd (CCOD) announced last week that it has successfully fulfilled the 100 million yuan contract inked with its Russian counterpart on coal mining equipment exporting.

As a branch of China National Coal Mining Equipment Co Ltd, CCOD signed the export contract with Southern Kuzbass Joint Stock Company of Russia late in 2005, building and supplying sub-caving fully mechanized mining equipments and services.

The equipment was installed and put into trial operation late last year. The project officially wrapped up last week with the equipment successfully exported and reaching the designed exploration capacity of 6,000 tons per day.

Steel JV

China Steel Corp, based in Taiwan Province, will take a 10 percent stake for $1.5 million in a joint venture led by Baoshan Iron Steel Co (Baosteel).

The venture, located in Changshu, in East China's Jiangsu Province, is set to start operation in April, providing steel products, marketing and distribution channels, said LM Chung, vice-president of China Steel, last week. Baosteel will take a 45 percent stake in the venture, while Jiangsu Baixue Electric Appliances will have 30 percent and Van Shung Chong Holdings of Hong Kong will take the remaining 15 percent.

(China Daily 02/10/2007 page2)