Renault’s Plan to Build Plant in Algeria to Be Secured This Week image

Renault plans to build a plant in Oran, Algeria, part of its plan to expand in the African market.

The agreement between the Algerian government and Renault will be signed this week, during French President Francois Hollande’s visit to the North African country. Renault plans to boost sales of its no-frills models, such as Dacia Logan, in other markets, as demand in Europe drops faster that at any other major automaker.

Also part of the expansion, Renault and its partner Nissan, will boost production at its 1 billion-euro ($1.3 billion) plant located in Tangier, Morocco. The new facility in Algeria will manufacture models similar to Renault’s Symbol, which is based on the Clio compact. The plant will be able to produce 75,000 vehicles annually.

LeFigaro newspaper was the first to report plans for the factory. According to the French newspaper the Algerian government will own 51% of the plant, while Renault will hold the rest. Although the plant will eventually manufacture 75,000 vehicles annually, the initial production will be of 25,000 units beginning with 2014.

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.