Of Dongguan's 48 cement makers, all but China Resources Cement would be forced to shut by next year, said vice-chairman and general manager Shi Shanbo.

'Only our company's plant was allowed to continue to operate because it meets the city's environmental requirements,' Mr Shi said.

The Dongguan expansion is part of the company's plans to increase its annual cement production capacity to more than 10 million tonnes in three years from 3.3 million tonnes.

In Guangxi province, the company will invest 1.3 billion yuan on the construction of a plant with daily production capacity of 10,000 tonnes It will also spend more than 160 million yuan to acquire a 73.5 per cent stake in Guangxi China Resources Pingnan Yufeng Cement, which has a daily production capacity of 5,000 tonnes.

Dongguan produced eight million tonnes of cement last year. This compares with Guangdong's 80 million tonnes and the national output of about 862 million tonnes.

China Resources Cement sells mainly to the Pearl River Delta region and Hong Kong.

Mr Shi expected that mainland sales would continue their growth momentum as the region's fixed asset investment registered a 28.7 per cent growth, which compared with the national average of 26 per cent.

He also expected sales in Hong Kong to pick up on the back of economic recovery.

The company was formed on March 13 last year and floated on the Hong Kong stock market in July.

Net profit to December 31 was $23.55 million, while turnover was $543.72 million.

Pro forma combined results for last year showed a 32.3 per cent decrease in net profit to $49.27 million, and a 19 per cent increase in turnover to $1.07 billion.