By Jin Jing (China Daily)
Updated: 2007-08-21 14:23

Nanfeng Cement, the nation's largest building materials manufacturer, has set up a joint venture with five other companies to boost its business in the fast-developing southeast.

China National Building Material Co Ltd (CNBM) takes a 75 percent stake in the new venture, Nanfang Cement, which has registered capital of 3.5 billion yuan.

Zhejiang Bangda Investment holds a 12.5 percent stake in the venture, Jiangxi Wannianqing 4 percent, Hunan SASAC 3 percent, Jianfeng Group 3 percent and Beijing Huachen 2.5 percent.

Nanfang Cement is expected to exceed 50 million tons in annual output, rivaling that of Anhui Conch Cement Co Ltd, the nation's largest producer.

"CNBM established Nanfang Cement as a platform to develop and acquire cement producers in the southeast region of China," the company said in a statement to the Hong Kong stock exchange last Friday.

Analysts said the increase in mergers and acquisitions by cement producers this year has been encouraged by the National Development and Reform Commission.

"The country's cement companies are undergoing large-scale consolidation to avoid price wars that could hurt everyone in the industry," said Luo Guo, an analyst at Orient Securities.

Anhui Conch Cement Co Ltd plans to acquire 50 to 58 million shares of Gansu Qilianshan Cement Co Ltd and has sped up consolidation in Northwest China, it told the Shanghai Stock Exchange on July 31.