Drinks giant Asia Pacific Breweries (APB) is investing US$120m in building a brewery in Guangdong, in a bid to continue its pursuit for growth in China.

The greenfield brewery, to be built by APB's joint venture company, Heineken-APB (China) Pte Ltd (HAPBC), through its wholly owned subsidiary, Guangzhou Asia Pacific Brewery (GAPB), is part of a plan to "further expand the Hainan market," the company said.

"The greenfield brewery investment in Guangzhou is aligned with our growth strategy for China," said Koh Poh Tiong, CEO of APB. "In recent years, our beer brands namely Tiger, Heineken and Anchor have made significant inroads into South China. To propel HAPBC's organic growth going forward, we are in need of additional capacity which the new Guangzhou brewery will aptly provide to match the potential demand growth of our brands there."

The greenfield brewery will be financed through a combination of external borrowings and internal funding by HAPBC's shareholders in proportion to their respective shareholdings.

"It is opportune that we invest in a plant in Guangzhou now so as to forge a more significant presence in South China where the affluent coastal areas of Pearl River Delta, including Guangzhou and its neighbouring cities, account for over 80% of the 31 million-hectolitre Guangdong beer market," added Tiong.

When completed in 2009, the new brewery will free up production capacity at the company's Hainan brewery, which currently supplies beers to South China.

"The Chinese economy is expected to continue to thrive, presenting greater opportunities to be tapped into. Given the favourable market conditions and potential, I am confident that our Guangzhou brewery will accelerate our growth momentum in South China," finished Tiong.