San Miguel Brewery Hong Kong is to cease brewing at one of its indirectly-owned facilities in China.

The company said earlier this week that Guangzhou San Miguel Brewery (GSMB) has agreed with its shareholder Guangzhou Brewery (GB) to halt beer production. GB owns 30% of GSMB, with the remaining 70% under the control of San Miguel Hong Kong unit San Miguel Guangdong.

Once the agreement is completed, GSMB will focus only on the sale and distribution of beer. GSMB has subsequently agreed to pay GB CNY32.2m (US$4.07m) with an additional CNY37.29m going to GB for the production facilities.

Guangzhou San Miguel Brewery was established in 1990.

In 2005, San Miguel Guangdong saw full-year operating profits almost triple.