E-Malt.com News article: 3350

China: Carlsberg A/S announced on 28 September 2004 that it makes further investments in North-West China. Carlsberg has entered an agreement with Ongo Investment Pte Ltd., a Singapore registered company, and various minority shareholders to acquire 34.5% of Wusu Brewery, located in the Xinjiang Autonomous Region in North West China.

The brewery will in the future be operated in a joint venture between Carlsberg and the Blue Sword Group, a local company in the region. The parties have agreed not to disclose the acquisition prise. Wusu Brewery has a capacity of approximately 2.5 million hl and a 60% market share in the region (equivalent to a total sales volume of 1.5 million hl beer).

"Carlsberg has probably paid a maximum of about 100 million crowns ($16.5 million) for the company. It seems a sensible buy and is in keeping with Carlsberg's strategy in the region," said Handelsbanken analyst Torben Sand. He said the move would not prompt him to make any major revision to his Carlsberg forecasts.

Annual per capita consumption of beer in the region is around 14 litres, which is below the national average of 20 litres per year, giving significant potential for growth.

“The acquisition of Wusu Brewery is a further step in fulfilling Carlsberg's strategy to establish a strong position in the western Chinese provinces,” said Jesper B. Madsen, Carlsberg’s Senior Vice President for Asia. “Recently, Carlsberg invested in the market leaders in the Gansu Province and in Tibet. Carlsberg also has a joint venture with our partner in the Gansu province to build a greenfield brewery in Qinghai province. Finally, Carlsberg bought the leading brewery in the Yunnan Province last year. With future engagements in several breweries, Carlsberg is now in a market leading position as well as the only international brewer with significant presence in the western part of China which geographically constitutes about one third of China and has more than 100 million inhabitants.” Yours faithfully Carlsberg A/S Attached: Map of Carlsberg’s engagements in West China.

At 0925 GMT, shares in Carlsberg were trading down 0.4 percent at 277 crowns, while the Copenhagen blue-chip KFX index was flat. In July, Carlsberg paid 115 million crowns for a 50 percent stake in Chinese Lanzhou Huanghe Brewery in the north-western province of Gansu. Carlsberg said the Lanzhou Brewery also had a capacity of 2.5 hectolitres. While it declined to give details, the company said the deal would have a slightly positive effect on its full-year guidance.


29 September, 2004