Goldman takes stake in Hongshi Group

Goldman Sachs has paid $120 million for a 25 percent stake in Chinese cement maker Hongshi Group, the China Business News reported, citing a Hongshi official.

Talks of the stake purchase started in October, 2005, and the transaction obtained Chinese government approval this October, said the paper.

Hongshi, set up in 2002, is now the biggest cement maker in China's eastern Zhejiang province, with an expected 3 billion yuan ($438 million) in sales this year, the article said.

Goldman Sachs managing director Kevin Zhang said last week that the Wall Street Bank would accelerate investment in China as opposition to foreign investment eases and the need for funding rises.

Goldman Sachs recently made a $100 million joint investment with China CDH Ventures in Himin Solar Energy Group, China's top maker of solar water heaters.

China's cement industry is likely to benefit from the government's 4 trillion yuan ($584.6 billion) economic stimulus package focused on infrastructure construction and social welfare.