KATHMANDU - Two private companies from China and Nepal signed an agreement of joint venture investment worth $300 million  here on Tuesday for cement production in Nepal.

The investment, one of biggest in Nepal's cement sector, has a 7:3 equity structure between Hongshi Holdings Limited of China and Nepal's Shiva Cement.

"This project with advanced technology will adopt a new dry process with the use of 95 percent domestic raw materials," Xu Youyuan, Executive Vice President of the Chinese company said at the signing ceremony.

Xu said that Hongshi were attracted to Nepal's market by its booming cement industry in 2012. According to the Nepal Cement Manufacturers' Association, there are over 40 cement plants in this Himalayan nation and domestic products only account for 85 percent of the total consumption in this country.

Addressing the ceremony, Finance Minister of Nepal Ram Sharan Mahat said that the signing of this project was a landmark between the economic ties of the two neighbors.

Mahat said he was happy to see that Chinese investors showed their confidence in Nepal and he hoped this ambitious investment would make Nepal an exporter of cement in the future.

Also on Tuesday morning, the minister witnessed an agreement signed by China and Nepal, according to which China would grant assistance for Nepal's development.