Three Chinese companies have signed a memorandum of understanding to build a $2 billion factory in South Africa, according to a report in the South African Economic and Business Review.
The factories will produce clothing, footwear and home goods for the Chinese market.
The two companies, which are also in the footwear business, will supply to the Chinese brand, Gucci.
The deal will see the two companies manufacturing clothing in the U.S. and China, as well as creating a manufacturing facility for Chinese luxury goods.
It comes just two days after Gucci unveiled plans to create its own factory in Africa, and it follows a move to build factories in China that are set to expand further.
The move is a signal that China is on the march toward creating its own manufacturing hub in Africa.
In 2017, Guppy announced plans to invest $1 billion in an Africa manufacturing facility.
The company said the facility would be an expansion of the manufacturing operation in the United States, and that the investment would lead to jobs and opportunities in the African continent.
The factory will employ 200 people and create 300 permanent jobs.
This will be the first factory in the region for Gucci, which has been in South African factories for decades.
A spokesperson for Guppy told CNN the company was not aware of the memorandum of agreement.