CHINA: SABMiller veers away from major purchases – report

By | 30 March 2006

SABMiller is focussing more on smaller acquisitions in China instead of big buys, according to local reports.

The South China Morning Post ran a story today (30 March) in which senior executives at the brewer were quoted saying that SABMiller is looking to solidify its presence in the country.

"We want to expand our strong role in regions where we already have business," SABMiller's Africa and Asia managing director Andre Parker told the paper. Going forward, Parker added, the company would be chasing double-digit sales growth.

The brewer, which owns a 49% stake in China Resources Breweries (CRB), will look at brewers whose annual production costs are between US$25 and US$30 per hectolitre, although acquisitions are likely to be slower than in the past, the report noted.

"Our objective is not to dominate the Chinese brewery market. There's no pride in being the biggest player in China. Making the product profitable is more attractive," Parker said.

Parker distanced himself from talk over Yanjing Brewery, China's only independent brewer, which has so far shunned takeover approaches from global brewers. "We intend to maintain our existing position in China," he said. "We don't need another large acquisition. Yanjing beer can be acquired by other brewers."

Last month, CRB acquired an 85% stake in Quanzhou Qingyuan Brewery, based in the southern Chinese province of Fujian, for around US$8.9m. The acquisition took SABMiller's share of the Chinese beer market to around 13.2%.

Sectors: Beer & cider

Companies: SABMiller

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