The value of CRH's investments in China is likely to hit €90 million when the company completes a deal announced yesterday.

The building materials giant said it had taken the first step towards buying 26 per cent of Chinese operator Yatai Cement.

The Irish group has signed a letter declaring its intention to acquire the stake, and taken an option to increase it to 49 per cent of Yatai after three years.

The news follows its announcement last week that it has agreed to buy the Harbin Sanling cement plant in northeastern China.

CRH gave no figures for either transaction. Davy Stockbrokers analyst Barry Dixon said yesterday that the two transactions represented a combined investment of €80 million-€90 million.

Mr Dixon based his estimate on recent deals that valued cement capacity at $40-$60 (€32-€48) a tonne. Yatai produces nine million tonnes of cement a year while Harbin Sanling has a capacity of 650,000 tonnes.

A Shanghai Stock Exchange-listed group, Jilin Yatai owns Yatai Cement. The Chinese government has to approve all foreign investments in local firms.

Yesterday, CRH finance director Myles Lee said the company expected approval for the Yatai deal to be given early next year.

He pointed out that because the transaction was at an early stage, the company could not reveal any details in relation to the price.

Up until now, CRH has focused on the American and European markets and made it clear that it was not going to rush into making investments in emerging markets such as China.

"What we have always said is that this is a very different market to what we are used to, it's at a very different stage of evolution," Mr Lee said.

"But we have been very open about the fact that we have been doing an increasing amount of research in that market."

He stressed that the group intended to grow its presence in China gradually, largely through buying shares in local operators, to allow it to learn how the market there worked.

Both Yatai and Harbin Sanling are located in the northeast of China. Mr Lee said it was "one of the areas of the country that we have been focusing on".

He pointed out that the Irish group was going to continue to focus on its existing European and American businesses. Earlier this year, it paid €1 billion for US asphalt producer Apac, its biggest acquisition.

Meanwhile, CRH confirmed it had taken up two seats on the board of Uniland, the Catalan cement producer in which it owns a 22 per cent stake. Other shareholders recently contested CRH's right to this holding but the Spanish courts ruled in the Irish group's favour.