Renault to sign agreement on new Algeria plant on Wednesday image

French automaker Renault SA is expected to sign a final deal on Wednesday to build a plant in Algeria for the local market.

The carmaker will use a visit by French President Francois Hollande to Algeria to seal the deal. Renault announced last week that the deal with Algeria was making progress but had yet to be finalized, following a memorandum concluded in May. A Renault spokeswoman declined to comment on Monday.

According to the Tuesday edition of French newspaper Le Figaro, the deal would see Algeria owning 51 percent of the factory, with Renault holding the rest. The plant would have an initial capacity of 25,000 vehicles per year from 2014, with a planned maximum yearly output of 75,000 cars, the report added. The Algerian auto market rose 47 percent in the first six months of the year to a total of 225,000 vehicles.

President Francois Hollande’s delegation will include senior executives from some of France’s top companies including oil giant Total, which aims to sign a $5-billion-deal to build an ethane steam-cracking plant. With 12 billion barrels of oil reserves, Algeria is the world’s 16th-largest oil producer. However, the North-African country has an annual trade with its former colonial master of just 10 billion euros.