China National Building Materials, a major Chinese cement producer, is to set up a cement joint venture with a registered capital of 10 billion yuan (USD1.6 billion).

China National will take a 50 per cent stake in the joint venture, with the rest split among three domestic companies, it said on Friday.

China National will contribute 3 billion yuan to the joint venture -- Southwest Cement Co Ltd -- later this month, and contribute the remaining 2 billion yuan in two years.

The venture should help the company expand in southwestern China through mergers and acquisitions, it said.