Japan's second largest brewer, Kirin Brewery, is looking to revive its fortunes - and its share price which is currently languishing close to 16-year low - by expanding its business in China which it sees as a key growth area for the next five to 10 years.

"Asia has plenty of room for growth so that's where we are focusing," says Naomichi Asano, chief executive of Kirin's international division. "In five years' time we will expand from being a Japanese beer company to a leader in Asia. Then we will look at becoming a top global operator."

While Asano has overseen Kirin's expansion through the Asia-Pacific region during the past six years with the acquisition of a 46% stake in Australian brewer, Lion Nathan, and 15% of San Miguel, China is to be the company's prime focus for international growth. The company already has a joint venture in China, Zhuhai Kirin President Brewery, which brews Kirin beer for the Chinese market. Kirin expects that China will become its biggest production base within five years.

Kirin's interest in China stems from the stagnation in the domestic beer market where the only growth has been in the happoshu sector and that has been driven by cut-throat price discounting. The beer market in Japan fell by 1.4% between 1997 and 2000, but the market grew by 11% in Asia, with growth of 7% in China. China's per capita beer consumption is currently just 25% of the figure for Japan.

Last week, Kirin raised its group net profit forecast for the first half of the year by 82% to Y10 billion, citing higher income from Lion Nathan and San Miguel and its decision to book research and development costs in the second half as the main reasons behind the revision.