SOUTH AFRICAN BREWERIES PLC STRENGTHENS POSITION AS THIRD LARGEST BREWER IN
THE FAST GROWING CHINESE MARKET
London, 31 May 2001, South African Breweries plc, one of the world's leading
brewers with operations in 22 countries, today announces that through its
Chinese joint venture company, CRE Beverage Ltd ("CREB"), it has acquired
three new brewery companies in China. They are China Resources (Dalian
Bangchuidao) Brewery Co Ltd, in Dalian city in Liaoning province, China
Resources (New Three Star) Brewery Co Ltd in Shangzhi city in Heilongjiang
province (both provinces are in North East China), and China Resources
(Sichuan Emei) Brewery Co Ltd in Leshan city in Sichuan province, in South
West China.
CREB has acquired the brewing assets and brands of the three breweries and
injected them into the newly formed joint venture companies. All three
acquisitions will be funded through a combination of internally generated
cash and local Renminbi debt at favourable rates.
"China is one of the fastest growing beer markets in the world at 7.2% per
annum and second only to the USA in terms of beer volumes consumed," said
Graham Mackay, CEO of SAB plc. "These further acquisitions underline our
commitment to this region and the huge potential it offers. The beer brands
and businesses now in our China portfolio confirm our position as the third-
largest brewer in the People's Republic of China and we plan to continue to
evaluate further expansion opportunities in this market."
The acquisition of 80% of the Bangchuidao brewery adds 1.25 million
hectoliters of capacity to CREB's existing Dalian brewery, which has been
operating at full capacity for the past two years. The additional brands
enhance CREB's strong position in the city. Further investment will be made
in terms of refurbishment and expansion at a total cost of investment of US$
42 million of which US$36.2 million represents the initial acquisition cost.
The acquisition of 70% of the New Three Star brewery marks CREB's entry into
Heilongjiang province, a province with a population of some 38 million
people and the highest per capita beer consumption in China. New Three Star
is the second largest beer brand in the province and Shangzhi city is
located 145 km South East of the provincial capital, Harbin. The initial
investment and further spend to balance and expand capacity to 2.5 million
hectoliters, is US$ 42 million of which US$35.5 million represents the
initial acquisition cost.
The third acquisition is 100% of the Leshan brewery and is CREB's second
brewery in the Sichuan province, which has a population of some 83 million
people. It is located 150 km south of the capital Chengdu. The brewery has a
current capacity of 0.5 million hectolitres. Total investment spend,
including refurbishment and further expansion to 0.8 million hectolitres
will be US$ 13 million of which US$7.6 million represents the initial
acquisition cost.
These investments are in line with CREB's expansion strategy and bring its
total number of breweries in China to 14, with a combined total capacity of
more than 21 million hectolitres.
- ENDS -
For further information:
Nick Chaloner, Director of Communications
SAB plc + 44 (0) 20 7659 0119
Anna Miller Salzman, Head of Investor Relations
SAB plc + 44 (0) 20 7659 0106
Salome Brown, Corporate Communications
SAB plc + 27 (0) 11 407 1700
Jonathan Glass, Partner
Brunswick Group Ltd + 44 (0) 20 7396 7486
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