E-Malt.com News article: 1515

China Resources Enterprise (CRE), a Beijing-backed conglomerate with a retail and distribution focus, said it would spend 195 million yuan (HK$183 million) to increase stakes in three Hubei breweries, Chinese Newspaper The Standard reported. The purchases will allow the mainland's second-biggest brewer by output to raise its shareholding in each brewery from 60 % to 90 %, CRE said in a statement to the Hong Kong stock exchange.

Acquired through the company's 51 % owned CR Breweries, the three brewers in central Hubei province have a proforma combined net asset worth of 564.39 million yuan, calculated according to Chinese accounting standards. Combined net profit last year was 26.77 million yuan, up from 19.86 million yuan in 2001.

The three Hubei breweries produce and sell the Xin Yin Ge, Dong Pi and Snow brands of beer. China's biggest beermakers are aggressively buying up smaller rivals to expand domestic market share and buffer the razor-thin margins in certain regions.

CR Breweries' latest buys come less than a month after another CRE unit paid HK$16.67 million to buy out a beermaker manufacturing the Snow and Lidu brands that have catered to the northern provinces. In the south, rival Guangdong Brewery Holdings said in July it would spend 350 million yuan on a new production plant in Shantou that will increase capacity by 200,000 tonnes.


04 September, 2003