China: Beijing Yanjing Brewery to construct a new plant in Yunnan Province

Beijing Yanjing Beer Group Corp, the parent of Beijing Yanjing Brewery Co Ltd, recently announced that it will invest RMB 600 million in a new beer production base in Kunming, the capital of Yunnan Province, China Knowledge cited unnamed sources on November, 17.

The new base, which will cover a land area of 15 hectares, will start construction by the end of this year. At the end of the first phase of construction, which will cost RMB 300 million, the plant will be able to produce 200,000 tons beer annually.

The plant will have an annual production capacity of 400,000 tons of beer when it is fully operational.

Expansion in Yunnan will help the firm consolidate the market in southwestern China. The firm has already expanded production in Sichuan Province and in the Guangxi Zhuang Autonomous Region.

However, the expansion prompted worries of excess capacity in the beer industry in Yunnan Province. The southwestern province produced about 300,000 tons in 2008, and its output capacity was 1 million tons.

Yanjing Brewery's net profit for the first three quarters of this year was RMB 564 million, up 26.04% year on year. Its beer sales were 3.99 million tons during the period.