Heineken has two other breweries in China

Heineken has two other breweries in China

Heineken has started construction on a third Chinese brewery as it aims to secure stronger margins in the high-growth market.

The site, which is expected to have an 8.5m-hectolitre annual capacity, is in Jiashan County, Zhejiang Province, 60km south-west of Shanghai. Workers broke ground last week and Heineken hopes to start production by the end of the year.

The greenfield brewery adds to Heineken's presence in China, which includes breweries on the southern island of Hainan and in Guangzhou. The facilitied produce Heineken's namesake brand and Tiger beer.

In an interview with just-drinks on Friday, Heineken's Asia Pacific president, Roland Pirmez, said a strong production footprint in China was important to the Dutch brewer's focus on the premium category. He said about half of the global growth in beer over the next five years will come from China, but warned attention must be paid to margins, which he said were the lowest in the world versus volumes.

“(In China) we have been really focused on delivering a premium quality product - price, packaging and ingredients,” Pirmez said. “You can be very quickly trapped by the speed, the energy and the volumes and if you're not managing carefully you can destroy your brand and you can destroy very quickly your value in China.”