E-Malt.com News article: 2308

Hong Kong: China Resources Breweries Limited (CRB), a subsidiary of Hong Kong-listed China Resources Enterprise, Limited (CRE) and a joint venture with global brewing giant SABMiller plc (SAB), announced that it has entered into a conditional agreement with the majority shareholder of Zhejiang Qianpi Group Company Limited (Qianjiang) to expand further into China's eastern beer market.

CRB, the second largest beer maker in China by volume, said that under the terms of the agreement, both parties will cooperate to reorganize Qianjiang into a joint venture company in which CRB will have 70% equity interests in Zhejiang Qianpi Group Co Ltd, also known as Qianjiang and the current shareholders of Qianjiang will hold the remaining 30%.

CRE expects that through the close cooperation with Qianjiang, CRB will be able to bring its experience, capital, management expertise, technical skill and success from the Northeastern part of China to the Eastern market.

Qianjiang is the single largest brewery in Zhejiang Province in terms of production capacity. With the new company, the annual production capacity of CRB will be increased by about 480,000 kilolitres to approximately 4.56 million
kilolitres with breweries in the North Eastern, South Western, Central and Eastern regions of mainland China. Qianjiang achieved sales volume of 240,000 kilolitres in 2003.

Furthermore, Qianjiang produces beer under two well-known brands in Zhejiang Province. With these two brands, CRB can strengthen its leading position in the brewing industry in China. CRB already has a portfolio of famous brands of beer, in which "Snow" is a national brand.

Frank Ning, Chairman of CRE, said: "With Qianjiang, CRB not only can strengthen its leading position in the brewing industry in China but also be able to expand its geographical coverage to the Eastern part of China. CRB will exploit its experience, capital, management expertise and technical skill in order to strengthen its brands and to bring better products and services to the consumers in China."

Kong Fei Yue, General Manager of Qianjiang, added: "Qianjiang is a leading brewing company in Zhejiang. We believe that the cooperation with CRB will increase Qianjiang's competitiveness and advantages and will transform the company into the most successful brewing company in Zhejiang."

China's beer industry has been a hive of dealmaking.
Earlier this year, Dutch giant Heineken NV, the global number-three, paid US$71 million for a 21 % stake in number 12 Chinese beer maker Guangdong Brewery, part of a spree of investments by global brewers in China. Mainland leader Tsingtao Brewery has bought dozens of its domestic rivals in recent years.


10 March, 2004