CHINA: SABMiller brewery makes Anhui acquisition
China Resources Snow Breweries Limited (CR Snow) has entered into an agreement with the Fuyang City government to acquire the assets of the Fuyang City Snowland Brewery Company in Anhui province for US$15m in cash.
The announcement today (11 April) follows the acquisition in June last year by CR Snow, which is 49% owned by SABMiller, of a 90% interest in the Shucheng and Liuan breweries in central Anhui, which produce the 'Longjin' brand.
The other 51% of CR Snow is owned by China Resources Enterprise.
The Snowland Brewery has a total annual production capacity of 1.4m hectolitres and achieved sales volumes of approximately 1.1m 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 2m hectolitres. The total annual production capacity for CR Snow will consequently increase to over 57m 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."
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."
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