Beijing Enterprises Holdings Ltd. said on January 28 its indirectly controlled brewery unit has formed a US$26M joint venture focusing on health drinks, to expand into China's beverage market. In the face of stiff competition from other mainland Chinese brewers, Yanjing Brewery is set to broaden its product range to include health drinks.

"In view of strong growth of the beverage market in the past few years, it is the appropriate time for the company to expand its business in healthy beverage products," Beijing Enterprises said.

In a paid notice, the Beijing municipal government-backed conglomerate said a joint venture company, Beijing Yanjing Beverage Co., was established on Jan. 17 by 75%-owner Beijing Yanjing Brewery Co. and 25%-owner Beijing Yanjing Beer Corp.

Yanjing Brewery is a 55.5% indirectly owned unit of Beijing Enterprise.

Yanjing Beer Corp. is wholly owned by Beijing Yanjing Beer Group Co., which also owns a 13.9% stake in Yanjing Beverage.

Beijing Enterprise said the total investment and registered capital of the joint-venture company are US$16 million and US$10 million respectively.

Yanjing Brewery will pay its part of the investment, totaling around US$12 million, using internal resources.

The joint-venture company will engage in the production and sale of beverage products and the provision of after-sales services in China.

28 January, 2003