SABMiller Associate acquires first Chinese brewery in Fujian Province
8 February 2006
China Resources Snow Breweries Limited (“CR Snow”), an associate of SABMiller plc and a subsidiary of China Resources Enterprise Limited (“CRE”), announces that it has acquired an 85% interest in Quanzhou Qingyuan Brewery Limited (“Qingyuan Brewery”) for approximately US$8.9 million. The residual 15% is owned by Q.F.G.C. (Limited).
Quanzhou, a major coastal city in the south east province of Fujian, has a population of over 7 million people. In 2004 Fujian Province recorded total beer sales of 13.5 million hectolitres and annual consumption per capita of 39 litres, exceeding the national average of 23 litres. At present, CR Snow does not have any plant in the province.
The consideration for the acquisition will be based on the appraised net asset value of Qingyuan Brewery to be determined after due diligence, which is expected to be approximately US$10.5 million. Qingyuan Brewery had net debt of RMB42 million as at 30 September 2005. The annual production capacity of the brewery is 1.2 million hectolitres and could be increased to 2.8 million hectolitres after an upgrade for an additional investment of RMB65 million. The major product line for Qingyuan Brewery is its “Qingyuan” series of beer, distributed for sale mainly in the Quanzhou area.
Mr. André Parker, Managing Director of SABMiller Africa & Asia, said, “Fujian Province is an attractive region to further build our presence in China and expand our fast growing SNOW brand. This transaction represents a very attractive value of under US$10 per hectolitre and is evidence of CR Snow’s continued price discipline in pursuing acquisitions in the region.”
Mr. Mark Chen, Managing Director of China Resources Enterprise, Limited said, “The acquisition is part of our national strategy for “SNOW” to expand into southern China prudently. We are already selling SNOW in Fujian Province and our cost efficiency will be enhanced in future. We will take advantage of the edges of Quanzhou to consolidate our market position in Fujian Province and would upgrade the existing facilities in two to three years’ time. Coupled with our greenfield plant at Dongguan, which has commenced trial runs recently, we have built a sound platform for further expansion to neighbouring areas of southern China.”
Notes to editors
SABMiller plc is one of the world’s largest brewers with brewing interests or distribution agreements in over 60 countries across five continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2005, the group reported US$2,194 million pre-tax profit and a turnover of US$14,543 million on a UK GAAP basis. SABMiller plc is listed on the London and Johannesburg stock exchanges.
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China Resources Snow Breweries Limited
China Resources Snow Breweries Limited was established in 1994 and is engaged in the production, sales and marketing of beer and beverages in China. Its shareholders are China Resources Enterprise, Limited and SABMiller plc. China Resources Enterprise, Limited has a 51% interest in China Resources Snow Breweries Limited while SABMiller plc holds a 49% interest. It operates about 40 breweries in the Chinese Mainland with a total sales volume of about 3.1 million kilolitres in 2004.
About China Resources Enterprise, Limited
China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is also traded on SEAQ International of the London Stock Exchange. It is also one of the constituent stocks of the Hang Seng Index in Hong Kong and Hang Seng London Reference Index. The Group focuses on the consumer businesses in both Hong Kong and the Chinese Mainland, with core activities being retail, beverage, food processing and distribution, textile and property investment.
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