CSI Beijing Brewery, 55 per cent owned by China Strategic Investment (CSI), is to spend up to US$60 million to double its production capacity by 1996. Chairman Oei Hong Leong said plans were being finalised to beef up the annual production capacity to 300,000 tonnes from the existing 140,000 tonnes within the next three years. Also, talks were taking place with a New Zealand group to introduce international brand names and expertise to the brewery, which is known for its Beijing Beer brand. ''Our strategy is to use our Beijing Beer brand to open up the foreign markets and the foreign brand names to expand the domestic market,'' said Mr Oei at the opening of CSI Beijing Brewery. CSI Beijing has 50 per cent of the draught market and 30 per cent of the other beer market in the Chinese capital. However, its share of the total Chinese beer market is extremely small, and about two per cent of its output is shipped overseas. Last week, CSI sold a 75 per cent stake in another beer subsidiary to two Japanese companies, Asahi Beer and Itochu, for US$35 million. The stake is for the breweries in Quanzhou and Hangzhou. Mr Oei said Asahi was a big name in Japan and it was unlikely that it would be involved in any licensing agreement without a major stake in the venture. But he added that CSI would like to maintain a major stake in CSI Beijing Brewery, even if the New Zealand party did decide to join the enterprise. CSI Beijing Brewery is under the control of China Brewery Holdings, a wholly owned subsidiary of listed CSI. Beijing Brewery owns the remaining 45 per cent of CSI Beijing Brewery. Besides the brewery, China Brewery also controls similar ventures in Yantai and Laizhou in Shandong province. The Beijing, Laizhou and Yantai breweries produce between 350,000 tonnes and 400,000 tonnes of bottled and draught beer a year. Mr Oei said plans to list China Brewery were still on the drawing board despite the deal to hive off a big stake in the Hangzhou and Quanzhou ventures to Asahi and Itochu. ''But there is still a need to expand to breweries and improve their management before listing. Investors do not buy into a company's history. They are more interested in their future,'' he said. Mr Oei said part of the proceeds from a recent US$80 million convertible bond issue would be used to finance the expansion of CSI Beijing Brewery. He declined to reveal the profitability of the brewery, but mainland sources said profit should reach 40 million yuan (about HK$35.4 million) under a new accounting system this financial year, which ends on December 31. Huang Lin Kui, CSI Beijing Brewery's general manager, said the Chinese beer market had been expanding at an annual rate of 25 per cent in the past eight years. He added that to compete more efficiently for a bigger market share, beer companies had been joining up with foreign companies, which were familiar with free-market practices.