bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

AUSTRALIAN brewing giant Foster's yesterday opened its third brewery in China, part of a A$150 million (about HK$884.4 million) investment in the mainland's growing beer market.

  The US$30 million Tianjin Foster's Brewery, 100 kilometres southeast of Beijing, is an equal joint venture between Foster's and Wheelock Group, with a minority stake being held by the Tianjin government and state-owned enterprises.

  The brewery emerged from the ruins of Tianjin's only other brewery, which was declared bankrupt and sold off at a public auction in January.

   The old plant has been completely closed with only the brewing equipment salvaged for the new venture.

  In just nine months the old equipment, partly manufactured by the Chinese nuclear industry, has been fully renovated and installed in the new brewery.

  Foster's Asia chief operation officer, Peter Williamson, said the deal involved no debt. The company simply acquired the assets of the old brewery and agreed to take on about 600 of its former employees.

  The plant will have an initial capacity of 50,000 tonnes a year and plant manager Peter Tee expressed confidence that 'every drop' of that capacity, which he estimated at about 180,000 tonnes a year, could be sold on the Tianjin market.

  Initially, the plant will only produce one brand, Largo, which, according to company executives, has been specially formulated to suit Tianjin's taste buds.

   The two major competitors, Lidu and Haomen beer, are both produced out of the province.

  Foster's has acquired the right to produce another Tianjin brew, Great Wall.

   But it will only start doing so when production of Largo has reached full capacity.

   Executives said the plant could produce genuine Foster's but the company had no immediate plans to do so.

  Foster's chief executive Ted Kunkel said the company had a three-stage development plan for the China market: the development of distribution and marketing; the development of technology and quality beer; and to increase volume to maximise existing capacity at the three breweries in Shanghai, Guangzhou and Tianjin.

  'At that time we will then look at the greenfield sites we have acquired at each of our three joint ventures for future development,' Mr Kunkel said.

   ''The timing of that would differ slightly from site to site.

   'All up, it will involve about A$150 million to get to that point.'   Foster's is currently losing about A$10 million a year on its China operations but Mr Kunkel said the company hoped to start generating a profit by the end of the century.

  It was perfectly normal given the high start-up costs, including the presence of 30 expatriate managers and technicians on site in Tianjin, for losses to be incurred in the initial stages of investment, he said.

  Foster's signed a memorandum of understanding with Wheelock and Co in June last year to work on the establishment of joint-venture breweries on the mainland.

  Wheelock chairman Peter Woo Kwong-ching expressed satisfaction with the progress made so far but was circumspect about the possibility of other ventures being established in the near future.



Wheelock-Foster's brewery opened