The Japanese drinks group Suntory has set up a joint venture with a local company in China and will build a new factory in the country to boost its output there by 50% by 2005, Japan's Nikkei newspaper reported on Saturday.

Suntory will invest about ¥2.00 billion to build the plant in Shanghai, and will take an 80% stake with its Chinese partner controlling the rest.

Once operational in 2005 the plant will produce oolong tea, sports drinks and fruit juice drinks.