Lafarge, the world's largest cement producer, and Shui On Construction And Materials Limited, the top cement producer in southwest China, have formed a joint venture partnership to merge their cement operations in China.

The joint venture, to be named Lafarge Shui On Cement, will be 55 percent owned by Lafarge and 45 percent owned by Shui On, according to Bruno Lafont, chief operational officer of Lafarge.

The new company, with a yearly capacity of 17.4 million tons and a capital of 800 million US dollars, is one of the largest cement producer in the country. It plans to add a new investment of 100 million US dollars within this year.

Lafarge Shui On Cement will combine Lafarge's cement operationsin the Chinese mainland, located in Sichuan, Chongqing and Beijing,with Shui On's cement operations in Chongqing and Sichuan, its larger plants in Guizhou, and the prospective acquisition of several important plants in Yunnan, which is awaiting approval from the central government authorities.

Southwest China has a high growth potential with a population of more than 200 million people, a rapid pace of development and extensive infrastructure development plans, said Mr. Lafont, who is also the designated chief executive officer of Lafarge and willtake the position on January 1, 2006.

Currently, China accounts for about 45 percent of the world's cement consumption, with an estimated market of 900 million tons in 2004.

Lafarge, the world leader in building materials, holds top-ranking positions in all four of its divisions: cement, aggregates and concrete, roofing and gypsum, while Shui On, a member of the Shui On Group, was listed on the Hong Kong Stock Exchange in 1997 and is engaged in construction and construction materials in Hong Kong and the Chinese Mainland.

Source: Xinhua