China's Tsingtao Brewery will shortly open its first Thai-made bottle.
The board of the nation's second biggest beermaker has agreed to invest 40 million yuan (US$5.3 million) to set up its first overseas plant in Thailand, the company said in a statement filed to the Shanghai Stock Exchange yesterday.
The initial investment will allow Tsingtao to take a 40 percent stake in the venture, which could produce 80,000 kiloliters of beer a year. The first phase of the project costing 294 million yuan will produce 40,000 kiloliters.
Tsingtao did not give a timetable for the construction or supply a name for its foreign counterpart in the statement.
Along with increasing demand from the domestic market, Tsingtao, 27 percent-owned by Anheuser-Busch Cos, the world's second-largest brewer, is looking to expand overseas sales to catch up with China Resources Snow Breweries Co, the biggest beer maker in China.
Qingdao-based Tsingtao, sells in more than 50 countries and regions accounting for 50 percent of China's total beer exports.
The third-quarter financial report of Tsingtao released yesterday shows the company posted a 52 percent jump in profit to 328.6 million yuan (US$34.7 million) and sales rose 15 percent to 4.2 billion yuan (US$55 million).
Sales in overseas markets rose 9.2 percent, lower than the 11.1 percent growth for the total sales in the third quarter.
Industry analysts said the plant will 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 Asian countries in the Asean Free Trade Area ahead of its ambition to break into the European and American markets.
Beer consumption in Thailand grew more than 12 percent year on year since 2002 and totaled 2.1 million kiloliters last year, Tsingtao said yesterday.
Southeast Asian countries, an emerging market for all beermakers with a rapidly expanding beer consumption, is also a hot export destination for domestic breweries including Zhujiang Brewery, which just expanded the capacity of a plant in Zhanjiang to add another 400,000 kiloliters.
Tsingtao Brewery also said yesterday it plans to invest 267 million yuan (US$356,000) to boost its barley production by 100,000 metric tons a year in its home city of Qingdao.