China's largest brewer Tsingtao Brewery said that it expects revenues to leap by more than 40% this year as demand increases for its products in the country.

The company said that beer demand this year will increase by about 5% helped by higher incomes of farmers and poorer urbanites.

The revenue rise would mean that Tsingtao could earn as much as ¥8.5 billion (US$1 billion) in revenues this year, compared with an estimated ¥6 billion last year. Tsingtao reported ¥4.7 billion in revenues in 2001.

The forecast for 2003 exceeds average analyst estimates of 7.13 billion yuan produced by Multex Global Estimates.

"The increase mainly comes from organic growth of existing facilities," company president Jin Zhiguo said.

The brewer, which has a partnership with US giant Anheuser-Busch, plans to acquire two or three smaller, domestic breweries this year, each with an annual output of about 500,000 tonnes, he said, but declined to name them.

The company has bought more than 40 breweries since 1997. Exports are also to be targeted with talks currently going on with a Southeast Asian brewer to produce Tsingtao brand beer for sale in the 10 member countries of the Association of Southeast Asian Nations (ASEAN), Jin said. The deal could be fixed by June.

"Exporting beer to these countries is subject to high tariffs and logistic costs. By producing beer there, we can cut costs substantially," he said.