15th Dec 2006 08:30
SABMiller PLC15 December 2006 15 December 2006 SABMiller joint venture makes China acquisitions in Shanxi province and Inner Mongolia China Resources Snow Breweries Limited ("CR Snow"), SABMiller's joint venture inChina with China Resources Enterprise, Limited ("CRE"), has announced that ithas agreed to acquire the brewing assets of Shanxi Yueshan Brewery CompanyLimited ("Yueshan Brewery") for a cash consideration of US$17.7 million. Inaddition, CR Snow will acquire the brewing assets of the Inner Mongolia MengyuanFine Wine & Brewery Company Limited ("Mengyuan Brewery") for a consideration ofUS$4.7 million, the first move by an international brewer into this region. The Shanxi province is located in the northern part of China, and to the east ofthe Yellow River with a population of about 34 million inhabitants. The InnerMongolian autonomous region borders the Shanxi Province and is the third largestregion among Chinese provinces and autonomous regions (over 1.1 million squarekilometres) with a population of 24 million people. Despite a relatively lowpopulation level, Inner Mongolia has a favorable beer market as beer consumptionper capita is high and the population is relatively concentrated in its majorcities. At present, CR Snow does not have a plant in either area, though 34,000hectolitres and 119,000 hectolitres of SNOW were sold in the two regions incalendar year 2005. In the first half of 2006, these sales volumes have grownstrongly, reflecting the rising demand for the SNOW brand across these areas. CRSnow will commence production of SNOW as soon as practicable followingcompletion of the acquisitions. Mr. Andre Parker, Managing Director of SABMiller Africa & Asia, said; "Theseacquisitions represent a natural progression for us, as we look to develop ourcurrent footprint across the northern and north-eastern regions. Both breweriesare in markets that we currently sell into and not only offer an attractivegrowth opportunity at justifiable costs, but also will enhance the potential forthe national roll-out of "SNOW" in China." Mr. Mark Chen, Managing Director of CRE said; "This signifies the expansion ofour existing beer production network along the coastal line and Yangtze Riverinto the neighbouring areas, attributed to the rapid development of "SNOW" as anational brand. As the standard of living and consumption power grow in theseareas, rising demand for higher quality beer is anticipated, providing excellentopportunities for CR Snow." The Yueshan Brewery is conveniently located at Jinzhong, which is approximately17 kilometers from the capital city, Taiyuan. In 2005, 600,000 hectolitres ofbeer was sold through the brewery which equated to a market share ofapproximately 30% in Jinzhong and 20% in Taiyuan. The total investment cost inthe Yueshan Brewery is expected to be around US$29.1 million, which includes anadditional investment of US$11.4 million to be installed in two phases. Aninitial amount of US$2.5 million will be spent on technology upgrades toexisting facilities in order to align with production requirements for SNOW.Subsequently, the remaining US$8.9 million will be invested in 2008 to upgradethe production capacity from 1.5 million to 2.5 million hectolitres of beer. The Mengyuan Brewery is strategically located in the north-eastern city ofUlanhot, providing a platform for entering into both the southern and northerncities of the Inner Mongolia autonomous region. A targeted level of investmentof US$2.5 million will increase production capacity from 500,000 to 600,000hectolitres. Total sales volume of the Mengyuan Brewery in 2005 amounted toaround 140,000 hectolitres. Ends Notes to editors About China Resources Snow Breweries Limited China Resources Snow Breweries Limited was established in 1993 and became ajoint venture with SABMiller plc in 1994. The company is engaged in theproduction, sales and marketing of beer and beverages in China. Its shareholdersare China Resources Enterprise, Limited and SABMiller Asia Limited, a subsidiaryof SABMiller plc. China Resources Enterprise, Limited has a 51% interest inChina Resources Snow Breweries Limited while SABMiller Asia Limited holds theremaining 49% interest. It operates more than 40 breweries in the ChineseMainland with a total sales volume of about 39.5 million hectolitres in 2005. About SABMiller plc SABMiller plc is one of the world's largest brewers with brewing interests ordistribution agreements in over 60 countries across five continents. The group'sbrands include premium international beers such as Miller Genuine Draft, PeroniNastro Azzurro and Pilsner Urquell, as well as an exceptional range of marketleading local brands. Outside the USA, SABMiller plc is also one of the largestbottlers of Coca-Cola products in the world. In the year ended 31 March 2006, the group reported US$15,307 million inrevenues and profit before tax of US$2,453 million. SABMiller plc is listed onthe London and Johannesburg stock exchanges. About China Resources Enterprise, Limited China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchangeand is also traded on SEAQ International of the London Stock Exchange. It is oneof the constituent stocks of the Hang Seng Index in Hong Kong. The Group focuseson the consumer businesses in both the Chinese Mainland and Hong Kong, with coreactivities being retail, beverage, food processing and distribution, textile andproperty investment. This announcement is available on www.sabmiller.com Enquiries: SABMiller plc Tel: +44 20 7659 0100 Sue Clark Director of Corporate Affairs Tel: +44 20 7659 0184 Gary Leibowitz Senior Vice President, Investor Tel: +44 20 7659 0119 Relations Sophie Brand Acting Media Relations Manager Tel: +44 20 7659 0172 This announcement does not constitute an offer to sell or issue or thesolicitation of an offer to buy or acquire securities of SABMiller plc (the"Company") or any of its affiliates in any jurisdiction or an inducement toenter into investment activity. This document includes "forward-looking statements". These statements maycontain the words "anticipate", "believe", "intend", "estimate", "expect" andwords of similar meaning. All statements other than statements of historicalfacts included in this announcement, including, without limitation, thoseregarding the Company's financial position, business strategy, plans andobjectives of management for future operations (including development plans andobjectives relating to the Company's products and services) are forward-lookingstatements. These forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actual results,performance or achievements of the Company to be materially different fromfuture results, performance or achievements expressed or implied by suchforward-looking statements. These forward-looking statements are based onnumerous assumptions regarding the Company's present and future businessstrategies and the environment in which the Company will operate in the future.These forward-looking statements speak only as at the date of this announcement.The Company expressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained in thisannouncement to reflect any change in the Company's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. Any information contained in this announcement on the price at which theCompany's securities have been bought or sold in the past, or on the yield onsuch securities, should not be relied upon as a guide to future performance. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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