LAGOS, Dec. 3 (Xinhua) -- China and Nigeria has signed a memorandum of Understanding (MOU) to set up a pharmaceutical manufacturing factory in Nigeria's southwestern state of Osun.

At the signing ceremony on Saturday in the state capital Osogbo, Zai Zhuangmiao, representative of China's Sichuan provincial government, said the project will cost 50 million U.S. dollars.

He explained that the construction of the factory, which would be producing anti-malaria drugs, would commence this month and be completed in June 2007.

Osun State Governor Olagunsoye Oyinlola who described the development as "a major breakthrough for the Osun government in its bid to attract foreign investment to the state," said Osun would give all necessary support, including land for the smooth take-off of the factory.

He added that the state had already a free trade zone and an airport approved for it which would effectively service the factory and similar ones that would be set up in the state.