China National Building Materials (CNBM), China’s biggest building materials manufacturer, has set its sights on leading the regional cement markets in southern China and the Huaihai area by investing RMB 33.3bn to lift annual cement output to 174Mt by next year from just 11Mt in 2006.

Earlier,  Morgan Stanley had predicted CNBM will triple its capacity by 2010 and it expects CNBM’s cement operating margin, which is now 4% below that of industrial leader Anhui Conch, to gradually close the gap. The investment bank is also bullish on the outlook for China’s cement industry, as it forecasts cement price increases of 8% in both 2008 and 2009 as well as 6% for 2010, based on its phasing out of inefficient vertical kiln production, continued industry consolidation, and healthy demand. 
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