AmeraMex International, Inc., a provider of heavy equipment to infrastructure construction, stevedoring and commercial construction, has reached an agreement in principle with San Francisco-based Marchetti Construction, Inc. to form a new company with ETHPE, the second-largest construction company in Algeria. Sixty percent of the new company (NewCo) will be owned by ETHPE, 30% by Marchetti Construction and 10% by AmeraMex.

The agreement is expected to be finalised the second week of January 2010 when AmeraMex president and CEO Lee Hamre and Marchetti Construction president Joseph Marchetti meet with Abdelbaki Talbi, vice president of ETHPE Construction.

Hamre identified two projects that have been approved for funding by the Algerian government. Both are five-star hotels with convention centres. One is a USD60 million project that is expected to break ground in the spring of 2010. The other will be built in Boughazoul, Algeria in 2011.

"In addition to our 10% ownership in NewCo, AmeraMex will be providing all heavy equipment for NewCo's projects," says Hamre.

These are examples of the kind of large-scale projects being planned in Algeria after 10 years of political instability and economic stagnation. Today, approximately 10% of the population is employed in the construction and public works sector, which has become a significant motor for economic growth and accounts for eight percent of GDP. Approximately 70% of the USD145 billion 2005/9 Programme for the Support of Economic Growth is allocated for housing and infrastructure.

The liberalisation of the Algerian market and the arrival of foreign companies are expected to boost the country's construction sector.