Beverages News
- China Resources Snow buys two breweries
Date: 19-Dec-2006 Sources: (Shenzhen Daily)
CHINA Resources Snow Breweries Ltd., the joint venture between China Resources Enterprise Ltd. and SABMiller Plc., will pay 176 million yuan (US$22.51 million) for two breweries in northern China to strengthen its leading position in the world's largest beer market.
China Resources Snow had agreed to buy the brewing assets in Shanxi Yueshan Brewery in China's northern province of Shanxi for 139 million yuan and Inner Mongolia Mengyuan Fine Wine & Brewery in Inner Mongolia Autonomous Region for 37 million yuan, it said in a statement yesterday.
Top global beer producers, such as SABMiller or Anheuser-Bush, are jostling to cash in on growth in China, where profit margins are paper-thin, with a bottle of beer often selling for 25 U.S. cents.
Japan's Kirin Brewery Co. announced earlier Friday that it would buy a 25 percent stake in China's Hangzhou Qiandaohu Brewery, which makes the Cheerday brand beer, for US$38 million.
SABMiller owns 49 percent of China Resources Snow, which had a 13.9 percent share in the domestic market and was the largest brewer in the country by sales volume and brewing capacity in the first half of 2006.
China Resources Snow plans to invest an additional 90 million yuan to expand the annual production capacity of Yueshan Brewery to 250,000 kiloliters from 150,000 kiloliters.
It would also pay 20 million yuan more to boost the capacity of Mengyuan to 60,000 kiloliters a year from 50,000 kiloliters.
China Resources Snow sold 7,000 kiloliters of 'Snow?brand beer in Shanxi Province and 12,000 kiloliters in Inner Mongolia in the first six months of 2006, although the company currently has no production plants in the two regions.
This represented a significant rise from sales of 3,400 kiloliters in Shanxi and 11,900 kiloliters in Inner Mongolia in 2005.
'In the first half of 2006, these sales volumes have grown strongly, reflecting the rising demand for the 'Snow?brand across these areas. China Resources Snow will commence production of Snow beer as soon as practicable following completion of the acquisitions,'China Resources Snow said.
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