Two state-owned building materials firms – China National Building Materials Group Corp (CNBM) and China National Materials Group Corp (Sinoma) – have started merger preparations in the latest move of SOE consolidation and shedding of cement industry overcapacity. Since their business overlapped in the cement sector, the reorganization will help the two enterprises reduce excess capacity and maintain their competitiveness. CNBM, headquartered in Beijing, is the world’s major non-metal materials manufacturer and cement equipment and engineering service provider, with total assets of more than CNY430 billion and 180,000 employees. It was ranked 327th on the Fortune 500 with revenue of USD31.7 billion in 2015, down 22% year-on-year. In the same period, it reported a net loss of USD142 million. Sinoma is also an industry leader in the non-metal materials industry, with total assets of more than CNY119 billion. Under the merger, a new building material giant will come into being, with total assets of nearly CNY570 billion.