Carlsberg adds new brewery in west China
new greenfield brewery in the Western Qinghai province.
The company said it invested $15 million for its 33.3 per cent stake in the venture.
Other partners include Lanzhou Huanghe Enterprise, which also owns a third of the business, and Qinghai Biological & Industrial Park Development & Construction Co and the Danish Industrialisation Fund for Developing Countries.
Carlsberg now runs 13 breweries in China either fully owned or joint ventures.
China is the world's biggest producer of beer with an output of 24m tonnes per year. Analysts recently cited Russia and China as two of the most important emerging beer markets in the world, even predicting the two nations could make up half of the global beer market by 2010.
A host of the world's major brewers, including Carlsberg, Heineken, SABMiller and Anheuser Busch, have begun jostling for position in China and neighbouring East Asian countries over the last year.
Carlsberg says that beer consumption in the Qinghai region is currently around 15 litres per capita, below the national average of 22 litres, but this is expected to increase with the improving economy.
On top of this companies in Qinghai are attracting more and more people from other provinces, also likely to increase beer consumption.
"There is no brewery in the Qinghai province, and being the only brewery there will give the joint venture competitive advantages, such as lower transportation costs," said Michael Fredskov Christiansen, head of Carlsberg's China operations.
He added that local people tend to prefer beer from their own province.
"Our joint venture partner Lanzhou Huanghe Enterprise Co has already established a strong level of presence in Qinghai, estimated to have a market share of 70 per cent, and the new brewery will further strengthen the venture's position in Qinghai," the CEO continued.
The brewery has an initial capacity of 0.6 million hectoliters and it is hoped that this figure will ultimately rise to 1 million hectoliters.
