SABMiller Associate Acquires Third Chinese Brewery in Anhui Province
11 April 2005
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 entered into an agreement with the Fuyang City government to acquire the assets of the Fuyang City Snowland Brewery Company (“Snowland Brewery”) in Anhui province for a cash consideration of US$15 million (RMB 125m). The announcement follows the acquisition in June 2004 of a 90% interest in the Shucheng and Liuan breweries in central Anhui, which produce the ‘Longjin’ brand.
The Snowland Brewery has a total annual production capacity of 1.4 million hectolitres and achieved sales volumes of approximately 1.1 million hectolitres in calendar year 2004. It is the largest brewery in the north-western region of Anhui and its brands include Snowland and Johnson. The acquisition takes the number of breweries owned and operated by CR Snow to 38 covering the North Eastern, South Western, Central and Eastern regions of the Chinese mainland.
Following completion of the acquisition, CR Snow will make a further investment to expand the production capacity of the Snowland Brewery to 2 million hectolitres. The total annual production capacity for CR Snow will consequently increase to over 57 million hectolitres (excluding the new brewery plant to be built in Dongguan, Guangdong).
André Parker, Manager Director of SABMiller’s Africa & Asia division, said:
“This acquisition gives us access to the north-western portion of Anhui province and builds on our dominant market share in Hefei and Liuan. It also further develops our significant market presence across the Central region where we have already established a strong foothold in Wuhan.”
Mr. Song Lin, Chairman of China Resources Enterprise Limited, said:
“We have enjoyed substantial cost and market synergies following the acquisition of the Longjin breweries. By consolidating breweries in proximate areas and integrating our sales and marketing efforts, this will enhance our revenue and operating margins and help Snow further penetrate the market.”
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 2003/04 lager sales volumes in excess of 137 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. In the year ended 31 March 2004, the group generated US$1,391 million pre-tax profit from a turnover of US$12,645 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
About 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 more than 30 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 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.
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