Tsingtao Beer to open 1st Thai plant

CHINA'S Tsingtao Brewery will open its first brewery in Thailand.

The board of the nation's second biggest beer maker has agreed to invest 40 million yuan (US$5.3 million) to set up its first overseas plant in Thailand, the company said in its statement filed with the Shanghai Stock Exchange market today.

The initial investment will allow Tsingtao to take a 40 percent stake in the venture, which is expected to produce 80,000 kiloliters of beer a year. The first phase of the project, which will cost 294 million yuan, will be able to produce 40,000 kiloliters annually.

Tsingtao didn't provide a time table for construction or the name of its foreign counterpart in the statement.

Despite increasing demand from the domestic market, Tsingtao plans to expand overseas sales to catch up with China Resources Snow Breweries Co, the biggest beer maker in China. Tsingtao is 27 percent-owned by Anheuser-Busch Cos, the world's second-largest brewer.

Qingdao-based Tsingtao currently sells its beer in more than 50 countries and regions worldwide, accounting for 50 percent of China's total beer exports.

The company's third-quarter financial report, which was released today, shows it posted a 52 percent jump in profit year-on-year to 328.6 million yuan with sales rising 15 percent to 4.2 billion yuan.

Sales in overseas markets grew 9.2 percent, lower than its 11.1 percent growth for the total sales in the third quarter.

Industry analyst said the plant will further benefit Tsingtao by eliminating import tariffs and boosting its price competitiveness in Thailand.

Thailand could also be a stepping stone for Tsingtao to tap other southeast countries in the Asean Free Trade Area ahead of its ambitions plans to target the European and American markets.

Beer consumption in Thailand has grown more than 12 percent annually since 2002 and reached 2.1 million kiloliters last year, Tsingtao said in an e-mail statement today.

Tsingtao Brewery also said today it plans to invest 267 million yuan to boost its barley production by 100,000 metric tons a year in its home city of Qingdao.