Beverages News
- Moutai eyes globe from remote base
Date: 23-Mar-2007 Sources: (Shenzhen Daily)
LEADERS used it to toast Richard Nixon, Kim Il-sung, Margaret Thatcher and Ho Chi Minh. Now, China's national liquor wants to conquer the world from its remote mountain base.
Shanghai-listed Kweichow Moutai, maker of the fiery Maotai drink served at Chinese State banquets, is planning on spreading its wings internationally.
Company spirits have been lifted by a doubling of its stock price in the past year as investors poured in, regarding Maotai as a niche luxury good whose popularity will grow as Chinese become more affluent.
Its bosses hope to find similar appeal by expanding abroad.
'We're planning on opening five or six offices overseas to introduce the product and Maotai culture to foreigners,'company chairman Yuan Renguo said recently, sitting in company headquarters in the poor, remote southwestern province of Guizhou.
'It is the national drink,'he said in heavily accented Mandarin. 'So in the future, Maotai will go out into the world.'
Though it traces its origins back two millennia, Maotai has been the drink of choice for generations of leaders.
Legend has it Chairman Mao Zedong first tasted the drink while leading his rag-tag army through Guizhou on the Long March in the 1930s.
It was used to toast the founding of the People's Republic of China on Oct. 1, 1949. Premier Zhou Enlai welcomed U.S. President Nixon with Maotai during his groundbreaking trip to China in 1972.
Zhou is called the 'father of Maotai?for his support of the company and his statue stands outside company headquarters.
It was on his instructions that all industry was banned from 100 kilometers upstream of the river used to make Maotai to preserve its purity. That rule stands today.
'We have no need to worry about pollution,'said Zhang Fan, manager of the strategy and planning department.
Since listing on the Shanghai Stock Exchange in 2001, the company has surpassed initial analyst expectations that it would suffer from competition or changing consumer tastes.
Net profit in 2005 soared 36 percent to 1.1 billion yuan (US$142 million). The company is due to announce full-year 2006 earnings April 3.
The stock, a favorite consumer sector play for domestic and foreign funds, has jumped from around 40 yuan last June to close at 97 yuan yesterday. In January, it became the first mainland stock to rise above 100 yuan in nearly six years.
Maotai, priced from a few hundred yuan to a staggering 38,000 yuan for an 80-year-old vintage, is so popular these days that supply cannot keep up with demand.
But Ji Keliang, board member and head of Kweichow Maotai's parent company, said there were no plans to bump up production, in part because their remote location makes getting the product to market difficult.
'Our problem is that transport is not very convenient,'said Ji, who has worked for the company for more than four decades and worked his way up from the bottom. 'There's only one road.'
Long stretches of the highway to Maotai from the provincial capital, Guiyang, are little more than a rutted stone track. It takes six hours to drive, traffic permitting. The last two hours require navigating a narrow mountain road and dodging tractors.
The 7,000 workers have their own television station, hospital, police station and even fire engines, so they don't have to rely too much on the outside world.
Executives say one of their trump cards is Maotai's 'green?credentials and 'superior?quality when compared with the many competitors making traditional Chinese spirits, like Wuliangye Yibin Co. and Luzhou Lao Jiao Co.
Maotai has organic certification and is aged a minimum of five years before hitting the market. Special tasters test new batches for purity every morning.
'It's not a simple process to make,'said Wang Diqiang, who heads the quality laboratory.
Sponsor Results:
