Retail player seeks move into the mainland
Retail player China Resources Enterprise is examining about seven acquisition proposals as it seeks to make a bigger push into the competitive mainland market, a senior official says.
Chief financial officer Frank Lai Ni-hium said yesterday that proposals in question covered beer breweries, food-related projects across the border and any consumer brands, which would help expand the group's operations.
He said the group's financial muscle was strong enough to fund potential acquisitions on the back of its HK$16 billion cash on hand.
It was in a net cash position, after taking into account nearly HK$13 billion in debts, Lai said.
'Cutting a deal in China is not an easy task because of strong competition and inflated asset prices,' he said at the group's annual general meeting. 'Acquisitions provide an instant expansion into the market.'
China Resources, which runs about 3,300 Vanguard and Suguo supermarkets across the country, processes and distributes foodstuff through Ng Fung Hong, and operates Snow beer breweries and the Pacific Coffee chain in Hong Kong, is challenged with inflation in consumer prices, raw materials and wages.
Lai said pressure on consumer price inflation showed signs of easing, and the group sought to launch higher-end products such as beer to offset higher costs.
He said the group would expand the capacity of some of its breweries by about 15 per cent to 16 million kilolitres a year this year to keep its market share.