Print Page | Close Window

SABMiller PLC - China Acquisitions

RNS Number:9626N
15 December 2006

15 December 2006

 SABMiller joint venture makes China acquisitions in Shanxi province and Inner

China Resources Snow Breweries Limited ('CR Snow'), SABMiller's joint venture in
China with China Resources Enterprise, Limited ('CRE'), has announced that it
has agreed to acquire the brewing assets of Shanxi Yueshan Brewery Company
Limited ('Yueshan Brewery') for a cash consideration of US$17.7 million. In
addition, CR Snow will acquire the brewing assets of the Inner Mongolia Mengyuan
Fine Wine & Brewery Company Limited ('Mengyuan Brewery') for a consideration of
US$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 of
the Yellow River with a population of about 34 million inhabitants. The Inner
Mongolian autonomous region borders the Shanxi Province and is the third largest
region among Chinese provinces and autonomous regions (over 1.1 million square
kilometres) with a population of 24 million people. Despite a relatively low
population level, Inner Mongolia has a favorable beer market as beer consumption
per capita is high and the population is relatively concentrated in its major

At present, CR Snow does not have a plant in either area, though 34,000
hectolitres and 119,000 hectolitres of SNOW were sold in the two regions in
calendar year 2005. In the first half of 2006, these sales volumes have grown
strongly, reflecting the rising demand for the SNOW brand across these areas. CR
Snow will commence production of SNOW as soon as practicable following
completion of the acquisitions.

Mr. Andre Parker, Managing Director of SABMiller Africa & Asia, said; 'These
acquisitions represent a natural progression for us, as we look to develop our
current footprint across the northern and north-eastern regions. Both breweries
are in markets that we currently sell into and not only offer an attractive
growth opportunity at justifiable costs, but also will enhance the potential for
the national roll-out of 'SNOW' in China.'

Mr. Mark Chen, Managing Director of CRE said; 'This signifies the expansion of
our existing beer production network along the coastal line and Yangtze River
into the neighbouring areas, attributed to the rapid development of 'SNOW' as a
national brand. As the standard of living and consumption power grow in these
areas, rising demand for higher quality beer is anticipated, providing excellent
opportunities for CR Snow.'

The Yueshan Brewery is conveniently located at Jinzhong, which is approximately
17 kilometers from the capital city, Taiyuan. In 2005, 600,000 hectolitres of
beer was sold through the brewery which equated to a market share of
approximately 30% in Jinzhong and 20% in Taiyuan. The total investment cost in
the Yueshan Brewery is expected to be around US$29.1 million, which includes an
additional investment of US$11.4 million to be installed in two phases. An
initial amount of US$2.5 million will be spent on technology upgrades to
existing facilities in order to align with production requirements for SNOW.
Subsequently, the remaining US$8.9 million will be invested in 2008 to upgrade
the production capacity from 1.5 million to 2.5 million hectolitres of beer.

The Mengyuan Brewery is strategically located in the north-eastern city of
Ulanhot, providing a platform for entering into both the southern and northern
cities of the Inner Mongolia autonomous region. A targeted level of investment
of US$2.5 million will increase production capacity from 500,000 to 600,000
hectolitres. Total sales volume of the Mengyuan Brewery in 2005 amounted to
around 140,000 hectolitres.


Notes to editors

About China Resources Snow Breweries Limited

China Resources Snow Breweries Limited was established in 1993 and became a
joint venture with SABMiller plc in 1994. The company is engaged in the
production, sales and marketing of beer and beverages in China. Its shareholders
are China Resources Enterprise, Limited and SABMiller Asia Limited, a subsidiary
of SABMiller plc. China Resources Enterprise, Limited has a 51% interest in
China Resources Snow Breweries Limited while SABMiller Asia Limited holds the
remaining 49% interest. It operates more than 40 breweries in the Chinese
Mainland 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 or
distribution agreements in over 60 countries across five continents. The group's
brands include premium international beers such as Miller Genuine Draft, Peroni
Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market
leading local brands. Outside the USA, SABMiller plc is also one of the largest
bottlers of Coca-Cola products in the world.

In the year ended 31 March 2006, the group reported US$15,307 million in
revenues and profit before tax of US$2,453 million. SABMiller plc is listed on
the London and Johannesburg stock exchanges.

About China Resources Enterprise, Limited

China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange
and is also traded on SEAQ International of the London Stock Exchange. It is one
of the constituent stocks of the Hang Seng Index in Hong Kong. The Group focuses
on the consumer businesses in both the Chinese Mainland and Hong Kong, with core
activities being retail, beverage, food processing and distribution, textile and
property investment.

This announcement is available on


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

Sophie Brand      Acting Media Relations Manager           Tel: +44 20 7659 0172

This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities of SABMiller plc (the
'Company') or any of its affiliates in any jurisdiction or an inducement to
enter into investment activity.

This document includes 'forward-looking statements'. These statements may
contain the words 'anticipate', 'believe', 'intend', 'estimate', 'expect' and
words of similar meaning. All statements other than statements of historical
facts included in this announcement, including, without limitation, those
regarding the Company's financial position, business strategy, plans and
objectives of management for future operations (including development plans and
objectives relating to the Company's products and services) are forward-looking
statements. 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 from
future results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding the Company's present and future business
strategies 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 any
updates or revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.

Any information contained in this announcement on the price at which the
Company's securities have been bought or sold in the past, or on the yield on
such 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 Exchange


Share price data provided by vwd group & financial data provided byMorningstar.