SABMiller associate acquires two Chinese breweries to strengthen foothold in Anhui Province
18 May 2004
China Resources Breweries Limited (“CRB”), an associate of SABMiller plc (“SABMiller”) and a subsidiary of China Resources Enterprise, Limited (“CRE”), announces that it has acquired a 90% interest in two breweries in Anhui Province from Anhui Longjin Group Limited (“Longjin Group”). The two brewing plants in Shucheng and Liuan produce the famous ‘Longjin’ brand. The Longjin Group retains the remaining 10% interest.
The consideration for the acquisition was based on the book asset value of the two breweries as at 31st December 2003 and, subject to adjustment, amounted to RMB280 million (c.US$34 million) including assumption of certain liabilities totalling RMB82 million (c.US$10 million). With a combined annual production capacity of about 2.8 million hectolitres, the two brewing plants achieved sales volume of approximately 1.4 million hectolitres in 2003.
Prior to the acquisition, CRB already owned and operated two breweries in Anhui and is one of the largest brewers in the province, with annual production capacity of 3.5 million hectolitres and sales volume in 2003 of 2.4 million hectolitres. With the acquisition, CRB will become the largest brewer in Anhui Province. Including the joint venture with Zhejiang Qianpi Group signed in March this year, the annual production capacity of CRB will be increased to about 49 million hectolitres. CRB will have 32 breweries covering the North Eastern, South Western, Central and Eastern regions of the Chinese Mainland.
Mr. André Parker, Managing Director of SABMiller's Africa & Asia division, commented “These latest acquisitions are another step in the creation of a powerful strategic growth platform for CRB, further strengthening its position as the second largest brewer in China. The transaction was completed at a price which represents excellent value to both SABMiller and CRE, and will enable us to access synergies and cost benefits with our existing operations.”
Mr. Frank Ning, Chairman of CRE, said, “The addition of Longjin will strengthen our presence in Anhui Province with a dominant market share in Hefei and Liuan. It will help span our significant market presence across the Central region, where we already have established a strong foothold in Wuhan. It will be another important platform for us to extend the distribution of our national brand, Snow.”
NOTES TO EDITORS:
Anhui Province has a population of 59 million people and is in the Eastern region of China.
About SABMiller plc
SABMiller plc is one of the world’s largest brewers, with 2002/03 lager sales volumes in excess of 115 million hectolitres. It has a brewing presence in over 40 countries across four continents and a portfolio of strong brands and leading market shares in many of the countries in which it has brewing operations. Outside the USA, SABMiller plc is one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2003, the group generated US$770 million pre-tax profit from a turnover of US$9,112 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
About China Resources Breweries Limited
China Resources 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, the third largest brewing group in the world. China Resources Enterprise, Limited has 51% interests in China Resources Breweries Limited while SABMiller plc holds 49% interests. It operates more than 30 breweries in the Chinese Mainland with total sales volume of 2.53 million kilolitres in 2003.
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 has a well-diversified portfolio of businesses in both Hong Kong and the Chinese Mainland, with principal activities being retail, beverage, food processing and distribution, textile and petroleum distribution.
This announcement is available on www.sabmiller.com
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