Moutai to spend RMB 950 mln to expand production

Kweichow Moutai Co Ltd<600519>, the only liquor supplier in China's state banquet, plans to spend up to RMB 950 million (US$135.7 million) to boost its production amid rising market demand for high-end spirits.

It plans to add 2,000 tons in output this year which will involve RMB 700 million, the company said on Thursday in a statement to the Shanghai Stock Exchange. The RMB 700 million will be made up by an earlier share offer, which raised RMB 64.08 million, with the residual part funded by itself.

According to its development plan, RMB 250 million will be allocated this year for the building of a new industry park.

In addition, Moutai expects to expand its annual capacity to about 30,000 tons by 2010 in an effort to entrench its leadership in China's high-end liquor market. Consequently, its total investment will be up to RMB 950 million upon completion by 2010.

Meanwhile, it reported sales rose 47.60% to RMB 7.24 billion in 2007 and saw a jump of 83.25% in net profit to RMB 2.83 billion.