CRH has signed a deal to take 26 per cent of the Shanghai-listed Jilin Yatai Group's cement operations, Yatai Cement, the latest phase in plans to tap into China's construction boom.

The €200-million deal with Jilin Yatai allows part financing of a doubling of production capacity and includes an option for CRH to increase its holding in Yatai Cement, based in the northeastern provinces of Heilongjiang and Jilin, to 49 per cent after four years.

CRH signed a letter of intent to buy the stake in Yatai Cement, which is one of China's top 10 cement producers, in October 2006, and the deal still requires regulatory approval.

CRH said it would have representation at financial, operational and board level and would "actively participate in the management of Yatai Cement".

An unprecedented building boom in China has transformed the country into the world's biggest consumer and producer of cement, home to half of all construction activity on the planet.

Jilin Yatai is one of 12 national cement makers chosen by China's government for preferential treatment as Beijing consolidates the industry by eliminating one-third of producers nationwide before 2010.

"Following our initial acquisition of the Harbin Sanling cement company in February 2007, we are very pleased to have the opportunity to invest in Yatai Cement which further increases and strengthens our cement position in northeast China," said CRH chief executive Liam O'Mahony.

The Jilin Yatai purchase gives CRH access to four integrated cement plants and two grinding stations with capacity of about nine million tonnes a year in the northeast.

A major investment programme to double annual cement capacity to 18 million tonnes is already under way with completion scheduled for 2009.

Finding acquisition targets in China is getting harder as rapid construction growth attracts the attention of the world's biggest industry players, such as France's Lafarge SA and Swiss-based Holcim Ltd, the world's two biggest cement makers.

Earlier this month, Holcim was given approval to buy up to 160 million shares in its Chinese affiliate Huaxin Cement, while Lafarge has bought several producers including Sichuan Shuangma Cement Co, giving it a production capacity in China of 21 million tonnes by 2006.