Kingway plans 400m yuan brewery to lift Foshan presence

Kingway Brewery Holdings, the second-largest brewer in Guangdong province, plans to invest 400 million yuan to build a brewery in Foshan to further strengthen its presence in its home base.

The Hong Kong-listed company, in which Dutch brewer Heineken owns a 21 per cent stake, said it has signed an agreement with the Nanhai municipal government in Foshan for the construction of a plant with 200,000 tonnes of annual capacity.

'Sales in Guangzhou and Foshan are more than 100,000 tonnes this year, which is provided by our Shenzhen plant currently, so the Foshan plant is likely to make a profit in the first year of production,' said director and general manager Jiang Guoqiang.

Kingway and rivals such as Yanjing Brewery and Tsingtao Brewery are lifting capacity to tap rising beer consumption in China, the world's largest market. China will take up 25 per cent of world's consumption by 2010, from 20 per cent in 2005, according to estimates.

The Foshan plant, Kingway's fifth in Guangdong and eighth in the country, is expected to start construction in January and commence production late next year or early 2008, Mr Jiang said.

The plant will bring the company's annual production capacity to 1.7 million tonnes, 1.1 million tonnes of which are in Guangdong where Kingway has a 20 per cent market share.