Breweries boost for red chip

PUBLISHED : Tuesday, 25 July, 2000, 12:00am
UPDATED : Tuesday, 25 July, 2000, 12:00am

Beijing Enterprises has acquired two breweries for 236.88 million yuan (about HK$221.86 billion) from its parent, in a move that will boost its presence in the world's second-largest beer market.

The red chip has announced it will acquire a 93.75 per cent stake in Yanjing Hen Yang for 169.38 million yuan and a 92.95 per cent equity stake in Yanjing Xiang Fan for 67.5 million yuan.

Yanjing Hen Yang and Yanjing Xiang Fan belonged to the Yanjing Group, a wholly-owned subsidiary of the Beijing municipal government, Beijing Enterprises' parent.

The intention is to turn Yanjing Brewery into Beijing Enterprises' brewery flagship to hold all of its brewing assets.

Yanjing Brewery's annual output at the end of last year stood at 900,000 tonnes.

The two breweries to be acquired together have annual production capacity of 180,000 tonnes.

The acquisitions were made in accordance with an undertaking by Yanjing Group, under which it will not compete with Beijing Enterprises in the brewing business, after they set up a joint venture brewing firm, Yanjing Brewery.

Beijing Enterprises has an 80 per cent stake in the joint venture, set up in March, 1997.

The net asset values of Yanjing Heng Yang and Yanjing Xiang Fan amounted to 180.67 million yuan and 72.62 million yuan at the end of last year, according to an independent valuer.

The Yanjing Group had acquired its stakes in Yanjing Heng Yang and Yanjing Xiang Fan stakes in January this year for 124.25 million yuan and 5.27 million yuan. Last year, Beijing Enterprises acquired Jiangxi Yanjing Brewery and Hunan Yanjing Brewery for HK$113 million.

Beijing Enterprises said in April its profit last year rose 2.2 per cent to about US$62 million.

The company said last month it planned to invest about 200 million yuan in a train service to shuttle visitors to the Great Wall from a nearby parking lot. The company also said it would acquire an 80 per cent stake in a beer producer in Hunan province from Yanjing Brewery for 45.97 million yuan.