China National Building Material to Establish Cement Arm

China National Building Material Co., Ltd. (SEHK: 3323) will further explore the eastern Chinese market via a new cement subsidiary, citing the Hong Kong listed company's latest announcement.

The new company is designed to have a total registered capital of CNY 1 billion, of which CNY 450 million, CNY 450 million, and CNY 100 million will come from China National Building Material, Liaoyuan Jingang Cement (Group) Ltd., and Beijing Hony Future Investment Advisor Ltd., respectively.

The JV will be created as the one with an annual cement production capacity of 50 million tons in the coming three years, mainly through M&As (mergers and acquisiitions) of several small and midsize companies, said insiders, adding that CNY 15 billion will likely fund the construction of its new production lines.

Most of its products will be sold in three northeastern Chinese provinces and Inner Mongolia, north China. Now, these markets are still denominated by some strong cement producers, such as Jilin Yatai (Group) Co., Ltd. (SHSE: 600881) and China Shanshui Cement Group Ltd. (SEHK: 0691).