CRE thirsty for growth
Consumer-focused China Resources Enterprise (CRE) aims to grab a bigger slice of the Guangdong beer market through the proposed purchase of a 21.37 per cent stake in dominant player Kingway Brewery Holdings, according to a top official.
CRE executive director and chief financial officer Lai Ni Hium, who also unveiled 34 per cent growth in CRE's underlying profit to HK$1.89 billion last year, expected the potential deal to markedly lift CRE's Snow beer presence in Guangdong.
Kingway revealed on March 11 its substantial shareholder, Heineken, had agreed to sell 365.76 million Kingway shares worth HK$1.28 billion to CRE, pending a decision from Kingway's state-owned parent GDI, which had a pre-emptive right to buy the stake. The potential Kingway deal is part of CRE's acquisition strategy to fuel growth and increase its exposure to the mainland's robust but competitive consumer market.
About one-third of the group's HK$8.6 billion capital expenditure this year was earmarked for purchasing assets and the rest was for expanding production and processing facilities for food. It will also open about 360 supermarkets around the nation to a total of 3,560 stores.
Lai said CRE aimed to have its beer division sales grow twice as fast as the market average of about 7 per cent this year, both through organic growth and acquisitions.
'We have some targets in the pipeline, but asset prices are inflating rapidly,' he said yesterday.