Mitsubishi Cement plans to pull out of the Chinese cement market as tighter environmental regulations take their toll and the supply glut hurts the company’s profitability, according to Nikkei Report.

The Japanese nonferrous materials maker signed an agreement on 30 March to sell a cement company in Shandong Province for an undisclosed sum to an affiliate of state-run cement giant China National Building Material.

Mitsubishi Materials holds a 66.67 per cent stake in the Shandong company, Yantai Mitsubishi Cement. Trading house Mitsubishi Corporation owns the remaining 33.33 per cent. With a production capacity of around 1.2Mta, Yantai Mitsubishi posted sales of CNY204m (US$30m) in 2016.

In addition, Mitsubishi will liquidate two cement admixture companies in Shandong and Jiangsu as it shifts its operational focus to the US, following an expected boost in infrastructure investment.