China: Singapore's Asia-Pacific Breweries hopes to boost its presence in China

Singapore's Asia Pacific Breweries is seeking to take a slice of the fast-growing Chinese market, Channel NewsAsia reported April 2.

For Singapore's Asia Pacific Breweries (APB), the market there is nearly 450 times the size of its home market.

APB already has plants in Hainan and Shanghai - but it also hopes to leverage on a good distribution network to boost its presence across the country.

One million bottles of beer come off the line each day at the plant in Hainan. Most of it is sold locally on the island - while about one-third goes up north to Guangdong. Asia Pacific Breweries' first plant in China has tripled in size since it started operating ten years ago. And today, it accounts for more than 4 out of 5 bottles of beer consumed in Hainan - led by its key brands Anchor and Tiger.

APB has held on to its dominant market position here on the island for 7 years, with the company now enjoying a market share of 85 per cent.

Malcolm Tan, General Manager of Hainan Asia Pacific Brewery Company says, "We call our market here Fortress Hainan internally in APB Group because it is that important and it is such a, should I say, consolidated market for us at the moment and we intend to defend the market position."

But APB also wants to break out of Hainan - and grow its presence across the country.

"Our strategy is to be in the growth areas, more affluent coastal cities so we are looking at the Pearl River Delta, which is the South, Guangdong area and then the Yangtze River Delta from Shanghai, Zhejiang and Jiangsu," says Huang Hong Peng, Regional Director, China, Asia Pacific Breweries.

Currently the company has plants in Hainan and Shanghai, but both have reached their full expansion capacity.

"If we want to really have a brand relevance in the entire South China, we probably need a number of breweries, not just one in Hainan," says Tan.

APB is among the group of foreign breweries which have been making forays into China. Experts say the main engine of growth for the world's beer market is here in Asia and leading that is China. Although per capita consumption is low compared to matured markets like the US, the potential is huge.

"China alone, although it is one country, we have always seen it as 31 markets. Guangdong itself, 80 million people, a GDP that's huge, a beer market size is already 25 million hectolitres, bigger than any of the ASEAN markets that we have today," says Huang.

It is now hoping to build on its position in Hainan - and leverage on its stakes in two Chinese brewers to distribute its brands across China, including of course, Tiger.

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