The new brewery will be the Danish brewers second biggest

The new brewery will be the Danish brewer's second biggest

Carlsberg is investing RMB5bn (US$782m) in building a major new brewery in the south of China to take futher advantage of the world's biggest beer market.

The Danish brewer is due to sign a deal on Friday with the the governor of Yunnan province, where the new facility will be built. Production at the site will begin in 2014. 

The new facility is expected to reach a production capacity of 10m hectolitres a year and will be Carlsberg's second biggest in the world. Only the Carlsberg-owned Baltika brewery in Russia, with an annual capacity of 12m hectolitres, will be bigger.

Carlsberg currently has a brewery in the city of Dali, but a spokesperson said this will be shut as there was no way to increase capacity at the site. "Therefore we will build a new brewery outside Dali in the Yunnan Province and the old brewery in the city will be closed," he said.

"The capacity of the brewery will be increased gradually in accordance with the growth in the market." The RMB5bn agreement runs for the period 2012 - 2025, he added.

Carlsberg's flagship Carlsberg and Tuborg brands will be produced at the site, along with local Dali beer.

Carlsberg currently owns 47 breweries in China in part or in full. 

"This investment reflects the large growth in the Chinese market and our confidence that it will continue in the years to come," said Carlsberg chief executive Joergen Buhl Rasmussen.

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