Kirin, SAB Miller expand presence in China
major presence in China through its joint venture China Resources
Snow Breweries, which last week said it would acquire two breweries
in northern China for a combined US$22.4 million.
China Resources Snow Breweries will pay US$17.7 million for a brewery in Shanxi Province and US$4.7 million for another in Inner Mongolia, SABMiller said in a statement. "These acquisitions represent a natural progression for us, as we look to develop our current footprint across the northern and northeastern regions, " said Andre Parker, managing director of SABMiller. SABMiller already owns 46 Chinese breweries in 13 provinces of China and claimed in October that its China Resources Snow venture has become the largest Chinese brewer by sales volume, beating domestic rival Tsingtao Brewery. Meanwhile Kirin, the second largest brewer in Japan, also revealed plans for Chinese expansion last week. It said that it is planning to invest US$38 million in a 25 per cent stake in Qiandaohu beer, a Hangzhou-based company. The purchase is expected to be completed in January 2007, when the factory will begin to produce Kirin beer. It is estimated that by the end of 2007 Kirin will increase its annual production in China from 5.4 million litres to 6.8 million litres. Kirin is looking for a bigger market share in the Yangtze River delta area of China where rival Asahi, Japan's leading brewer, already has a presence. Asahi invested US$36 million in building a new beer factory in Huzhou city (Zhejiang province) earlier this year. Another Japanese brewer, Suntory, has also gained a presence in the area, cornering 69 per cent of the market, according to the Beijing Business Daily. Kirin retains the right to raise the share it owns in Qiandaohu to 49 per cent in five years.