Chinese beer maker Kingway Brewery has signed an agreement to build a production site in the southern province of Guangdong.

Kingway said yesterday (1 November) that it had struck a deal with local government authorities in the city of Foshan to build a brewery at a cost of around CNY400m (US$x).

The brewery in Foshan will produce Kingway's flagship eponymous brand, the company said. It added: "The directors are of the view that the establishment of Kingway Foshan is a good opportunity for the group to expand its market presence in Guangdong Province."

In September, Kingway recorded a 12% fall in first-half profits as marketing costs and expenses related to the construction of breweries in Xian and Chengdu ate into earnings.

Heineken holds an indirect 21.44% interest in Kingway through Heineken-APB (China), a joint venture between Asia Pacific Investment (API) and Asia Pacific Breweries. API is a holding company jointly-owned by the Dutch brewing giant and Singapore-based conglomerate Fraser and Neave.