SABMiller has increased its presence in China, despite a widely-expected battle with Anheuser-Busch for control of Harbin Brewery. China Resources Breweries (CRB), an associate of SABMiller and a subsidiary of China Resources Enterprise (CRE), announced yesterday that it has acquired a 90% interest in two breweries in Anhui Province from Anhui Longjin Group.

The two brewing plants in Shucheng and Liuan produce the 'Longjin' brand. Anhui Longjin Group will retain the remaining 10% interest.

The acquisition, based on the book asset value of the two breweries as at 31 December 2003 and subject to adjustment, amounted to RMB280m (US$33.8m) including assumption of certain liabilities totalling RMB82m.

With a combined annual production capacity of about 2.8m hectolitres, the two brewing plants achieved sales volume of approximately 1.4m hectolitres in 2003.

Prior to the acquisition, CRB already owned and operated two breweries in Anhui and is one of the largest brewers in the province, with annual production capacity of 3.5m hectolitres and sales volume in 2003 of 2.4m hectolitres. With the acquisition, CRB will become the largest brewer in Anhui Province.

Including the joint venture with Zhejiang Qianpi Group signed in March this year, the annual production capacity of CRB will be increased to about 49m hectolitres. CRB will have 32 breweries covering the North Eastern, South Western, Central and Eastern regions of the Chinese Mainland.

In a statement, André Parker, managing director of SABMiller's Africa & Asia division, said: "These latest acquisitions are another step in the creation of a powerful strategic growth platform for CRB, further strengthening its position as the second largest brewer in China. The transaction was completed at a price which represents excellent value to both SABMiller and CRE, and will enable us to access synergies and cost benefits with our existing operations."

Frank Ning, chairman of CRE, added: "The addition of Longjin will strengthen our presence in Anhui Province with a dominant market share in Hefei and Liuan. It will help span our significant market presence across the Central region, where we already have established a strong foothold in Wuhan. It will be another important platform for us to extend the distribution of our national brand, Snow."