SABMiller buys into China's beer-loving Fujian province
to acquire another brewery, hoping to take advantage of the area's
above average beer consumption.
SAB said its Chinese associate firm CR Snow had bought 85 per cent of the Qingyuan brewery in Quanzhou, a major coastal city in China's south east province of Fujian.
The group hopes the brewery, which has a capacity of 1.2m hectolitres per year, will help to build up its strongly growing Snow beer brand in the area.
Fujian, China's fourth richest province, also sits at the forefront of country's fast-growing beer market. People there drank an average 39 litres of beer each in 2004, a total of 13.5m hectolitres, which was almost double the national average of 23 litres per person.
SAB said production capacity at the Qingyuan brewery could be more than doubled to 2.8m hectolitres, leaving scope to cope with the expected rise in demand for beer.
SAB's move into the Fujian province follows hot on the heels of rival international brewer Inbev, which signed a deal at the end of January to speed up its acquisition of the area's Sedrin brewery - to create Inbev Sedrin.
InBev agreed to pay €614m for Sedrin, the largest brewer in the province with a 45 per cent share of the beer market there in 2004.
Carlos Brito, InBev's new chief executive, said: "Fujian Sedrin is one of the most profitable Chinese brewers and in recent years has achieved an EBITDA margin in excess of 30 per cent.
"The Sedrin brand will be one of InBev's top five selling brands globally by volume with significant potential for growth and expansion."
InBev has moved into China rapidly, and has made itself the market leader in the eight provinces in which it operates.
China is the world's biggest producer of beer with output of some 24m tonnes per year. In 2003, the average Chinese adult consumed 18.76 litres of beer. This compared to 44.5 litres in South Korea, 41.9 in Japan and 29 litres in Hong Kong.
