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Having Restructured Jiangsu Santai Beer Co., Ltd, China Resources Snow Breweries Leads the Market in Southern Jiangsu and Sets to Conquer the Central Jiangsu Market (Translation)

24 February 2011

 

On February 23rd 2011, China Resources Snow Breweries (China) Limited (hereinafter abbreviated as CR Snow) officially announced that it had leveraged on its assets to restructure Jiangsu Santai Beer Co., Ltd (hereinafter abbreviated as Santai Beer), thus obtaining the rights to use the Santai trademark and the marketing channels for Santai Beer. At the same time, it has established China Resources Snow Breweries (Taizhou) Co., Ltd and invested USD40 million in the high-tech industrial park at Gaogang district in Taizhou city. The new premises are expected to produce 200,000 kiloliters of beer each year.

Of late, this has been the second operation by CR Snow in the eastern China market. Shortly prior to this, CR Snow had secured its leading market position in Zhejiang and obtained a controlling stake in Zhejiang Xihu Beer Co., Ltd with RMB268 million. Most industry players believe that, through successive strategies adopted in Zhejiang and Jiangsu, CR Snow will further increase its share of the beer market in the highland area of eastern China this year and its leading market position will be further entrenched.

Its dominant position in the eastern China market is only a snapshot of the prosperous business that CR Snow enjoys in the entire China market. With national sales volume topping the charts for six consecutive years, CR Snow is already the leading beer company in the China market.

In 2004, CR Snow acquired the China operations of the Australian beer company Lion Nathan with an investment of RMB1.45 billion and made full inroads into the Jiangsu market. Through expansion and subsequent construction plans, it now has four factories in Suzhou, Wuxi, Changzhou and Nanjing with modern manufacturing facilities that can produce one million kiloliters of beer each year. Its repertoire encompasses the full range of bottled, canned and draft beer products that are processed and packaged professionally. Its strategy of capturing a prime slice of the southern Jiangsu market is thus successful and complete. Since 2006, CR Snow has been topping production and sales charts in the Jiangsu market for consecutive years. In 2010, it even hit a historical high and amassed a market share of about 40% as it continued to build upon its strengths as the market leader.

Over the past years, CR Snow has chosen the must lucrative southern market in Jiangsu. Restructuring Santai Beer marks CR Snow's progressive expansion plans in the Jiangsu market. Moving beyond southern Jiangsu, it is now setting its sights on central Jiangsu. Many industry players think that CR Snow has adopted a wise marketing strategy by restructuring Santai Beer. Located in Taizhou, the central part of Jiangsu, Santai Beer is close to the southern Jiangsu market which is the base of CR Snow. Such vantage points will be beneficial to CR Snow's expansion plans in the central Jiangsu market.

Santai Beer is the one of the most established beer manufacturers in Jiangsu province and the Santai series of beers is a renowned Jiangsu brand. With the Santai trademark commanding a premium reputation in Jiangsu province, the beer had been widely popular along the northern and southern reaches of Yangtze River. In Jiangsu province, Santai Beer has generated the greatest sales volume compared to fellow industry players. However, it had not been spared from harsh market competition brought about by corporate mergers, acquisitions and restructuring in the beer industry. Under such a backdrop where Santai Beer was fully aware of the need to be aligned with and even collaborate with stronger brands, it had taken the initiative to bring in new talents instead of fighting a lone battle, which is unhealthy.

CR Snow indicated that China Resources Snow Breweries (Taizhou) Co., Ltd would abide by the principles of hygienic production, energy efficiency, low carbon emissions and environmental protection in the setting up of its infrastructure. It will strive to reach or even surpass national standards in areas such as energy efficiency, carbon emissions reduction and the setup of eco-friendly equipment and facilities, thus fully reflecting CR Snow's high level of commitment to its corporate social responsibility. With production technology and equipment complying with the most advanced international and local standards, CR Snow aims to provide consumers with beer products that are of consistently high and reliable quality.

When the setup of China Resources Snow Breweries (Taizhou) Co., Ltd is complete, it will leverage on its efficient abilities in brand integration, strengths in upholding technological excellence, a premium corporate management system and its experiences in marketing and operations to spur the healthy development of the beer industry in Jiangsu as well as further integration of the diverse brands of beer in the Jiangsu market.

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About China Resources Snow Breweries (China) Limited
Established in 1994, China Resources Snow Breweries (China) Limited is a professional beer company involved in the production and management of beer products nation-wide. Its headquarters is in Beijing, the capital of China, and its shareholders are China Resources Enterprise Ltd and SABMiller, the second largest beer conglomerate in the world. Currently, CR Snow is managing close to 70 beer factories in China. By managing its Snow Beer brand and other brands that are spread over 30 territories and counting, it has occupied a total market share of 19.8% in China's beer industry. In 2009, CR Snow sold more than 8.37 million kiloliters of beer, marking an annual growth of 15.3%. For five consecutive years, the company's total production and sales volume has been leaps and bounds ahead of those generated by other beer companies in China. The Snow Beer brand alone brought about sales volume of 7.24 million kiloliters in 2009, registering a further increase of 18.8%. This has entrenched the leading position of this brand of beer in the global market.

About Snow Beer
In 1964, at a product competition attended by the movers and shakers of China's beer industry, a new product defeated all the established brands of beer in China to emerge as the champion. This type of beer, with its lingering fragrance reminiscent of a blossoming flower and rich foams that are as white as snow, subsequently became known as "Snow Beer".

In 2002, China Resources Snow Breweries (China) Limited stepped up efforts to shape Snow Beer into a national brand. Since then, Snow Beer has been widely adored by consumers throughout China for its light and refreshing taste, as well as its progressive and innovative brand personality that is all about challenging the norms and striving for excellence. It has become the most popular brand of beer among the young generation today.

In September 2007, the Trademark Office of the State Administration for Industry and Commerce of the People's Republic of China affirmed the Snow Beer trademark as a renowned China trademark.

In 2005, the Snow Beer brand alone generated sales volume of 1.58 million kilolitres, making it the top-selling brand of beer in China. In 2006, Snow Beer became the brand with the fastest rate of growth and highest value in China's beer industry. Its brand value was estimated to be worth RMB11.185 billion. Following the success of 2006 when Snow Beer generated the highest sales volume compared to other brands of beer in China, it moved on to hit another historical high in 2007. With sales volume of 5.1 million kiloliters, it topped the sales chart in China's beer industry once again for the third consecutive year. The brand value of Snow Beer also rose to RMB13.658 in 2007. In 2008, sales volume of the Snow Beer brand increased by 19.1% to reach 6.1 million kiloliters and for the fourth consecutive year, it remained the top-selling brand of beer in China. At the same time, the brand also topped the global sales chart for beer products and its brand value rose to RMB15.3 billion. In 2009, the value of the Snow Beer brand increased to RMB37.726 billion.

About China Resources Enterprise Ltd
Listed on the Stock Exchange of Hong Kong, China Resources Enterprise Ltd is one of the constituent stocks of the Hang Seng Index. The conglomerate focuses on the business of consumer products across mainland China and Hong Kong. It is mainly involved in retail, food and beverage, food processing and distribution trades.

About SABMiller plc
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About China Resources Snow Breweries (Jiangsu) Limited
China Resources Snow Breweries (Jiangsu) Limited was established at the end of 2004 when CR Snow had fully acquired the China operations of Lion Nathan. For more than eight years, CR Snow has embarked on expansion and subsequent construction plans and now, it has four factories in Suzhou, Wuxi, Changzhou and Nanjing with modern manufacturing facilities that can produce one million kiloliters of beer each year. Its repertoire encompasses the full range of bottled, canned and draft beer products that are processed and packaged professionally. Producing famous brands of beer such as Snow Beer, Steinlager, Taihushui, Rheineck and Linkeman, its annual sales volume amounts to more than 600,000 tons and it has been occupying a leading position in the Jiangsu market for a long period of time. Currently, it has established 10 major marketing footholds in places such as Suzhou, Wuxi, Changzhou, Nanjing, Zhenjiang, Yangzhou and Taizhou. In Jiangsu, it has set up offices in nearly 20 cities. With this huge network, it enjoys total marketing coverage throughout the province.

Suzhou Factory
Located in the scenic Suzhou industrial park, the Suzhou factory is near Airport Road and adjoins Jinji Lake. It is equipped with modern production lines that represent the advanced standards of China's beer industry. The series of beers it produces, including Snow Beer, Taihushui and Steinlager, has been widely adored by the people of Suzhou. With its beautiful environment, stringent management systems, quality excellence and considerate services, it has earned a good reputation for itself in eastern China.

Wuxi Factory
Located in the picturesque Wuxi (Mashan) Taihu Lake National Tourist Resort, this factory is equipped with state-of-the-art facilities. The Taihushui series of beer it produces has occupied a market share of more than 70% in Wuxi, making it a specialty product of Wuxi which the locals are proud of. This factory is capable of producing more than 80,000 tons of beer each year, thus generating tens of millions in profits and taxes for Wuxi.

Changzhou Factory
Originally located in the bustling Changzhou city area, which is easily accessible, this factory is steeped in history and has been widely adored by the people of Changzhou for years. The brands of beer it produces, such as Snow Beer, Rheineck, Linkeman and Taihushui, have been selling well in the local market as well as the markets of Nanjing and central Jiangsu. The new Changzhou factory, which cost RMB250 million to build, is located in the Changzhou National Hi-Tech District which is believed to have huge potential. It adjoins the Shanghai-Nanjing expressway and has been designed and constructed according to the highest standards. This factory is capable of manufacturing 250,000 tons of beer each year.

Nanjing Factory
CR Snow's Nanjing factory is located in Nanjing Jiangning Science Park, which beckons with the beauty of nature and the talents nurtured by the environment. Spanning 200,000 square meters, it cost USD90 million to build and is capable of manufacturing 400,000 tons of beer each year. Construction of the new factory has been done according to the highest standards at every stage. There are four fully automated lines for bottle packaging and the factory is fully equipped with high-speed EBI (Empty Bottle Inspectors) and other modern facilities imported from Germany. As a modern beer-manufacturing plant, this factory is currently the largest on the Yangtze River Delta to be constructed immediately after the investment was made. The high quality beer it produces not only serves to satisfy the needs of Nanjing consumers, the beer has also been supplied to peripheral cities such as Zhenjiang and Yangzhou consistently. Therefore, the service radius of the factory encompasses central Jiangsu and parts of Anhui.

About Jiangsu Santai Beer Co., Ltd
Located in the Gaogang district of Taizhou, which is in turn situated in Binjiang on the Yangtze River Delta, Jiangsu Santai Beer Co., Ltd is a beer-manufacturing plant that started operations in 1975. It is one of the oldest beer factories in Jiangsu province.

The company has since developed into a multi-faceted management company comprising enterprises such as Huai'an Santai Beer Co., Ltd and Jiangsu Santai Beer Marketing Co., Ltd, besides the original Jiangsu Santai Beer Company. It has total assets of RMB300 million and its premises occupy a total surface area of 180,000 square meters. It is capable of manufacturing 150,000 tons of beer each year.

The company mainly manages the Santai series of beer, purified water and ginkgo crystals. Among these products, the Santai series of beer has been accredited with numerous accolades during quality evaluations, thanks to its consistently premium quality. In terms of production and sales volume, it is also one of the leading brands of beer in Jiangsu province.

From 1999 to 2008, over the course of 10 consecutive years, Santai beer has been named "the renowned product of Jiangsu" and it has been successively appraised as "the iconic beer of Jiangsu province", "heritage product of Jiangsu province" and "product of reliable quality in Jiangsu province", amongst other accolades. As for the Santai trademark, it has been appraised as a "renowned Jiangsu trademark" for seven consecutive years. In 2006, the company obtained its ISO 9001:2000 certification. From 2005 to 2008, the company was evaluated and named "Jiangsu manufacturer for safe food products". It has also been named "a management company with integrity" after appraisals were done by the Jiangsu Consumers' Association. The ginkgo beer has been named "quality brand of new China beer" for its unique healthcare effects, after evaluations were done by the China Alcoholic Drinks Industry Association.
In 2008, Huai'an Santai Beer Co., Ltd, of which Jiangsu Santai Beer Co., Ltd has total controlling stake, completed its annual production of 100,000 tons of beer.

This SABMiller subsidiary news release has been translated from its local market language to English language for publication on www.sabmiller.com. We have attempted to provide an accurate translation of the original material but due to the difficulties of translation slight differences may exist.

Note, the news release was first published in its local market on [23/02/2011].

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