Kirin enters new soft drink joint venture in China

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Kirin Holdings has invested $400m in a new soft drinks joint venture with China Resources Enterprise as it looks for growth opportunities outside the stagnant Japanese market.

China Resources will hold the majority 60 per cent stake in the new joint venture and Kirin will own the remaining shares.

The tie-up brings together the soft drinks operations of China Resources with those of Kirin in China in a deal designed to fuel future growth in the country.

China Resources stands to benefit from the addition of Kirin brands and product development expertise while Kirin can leverage the local knowledge and distribution network of its partner. China Resources has established a network of over 3,000 retail stores nationwide in China.

Asian gowth plans

For Kirin, the deal offers an opportunity to extend its business further beyond the domestic market where sales growth has flattened in recent years as the population falls and ages.

Under its 2015 strategic plan, Kirin plans to become the leading company in Asia and Oceania in the area of food and health. China is a crucial part of that plan – and an especially attractive proposition considering the growth figures achieved there in recent times.

Between 2004 and 2009, China Resources has seen demand for its bottled water products increase at a cumulative rate of around 27 per cent.

Kirin is investing a total of $400m in the new joint venture with China Resources.