China: Kingway Brewery Holdings invests US$ 100 million in a new brewery

Kingway Brewery Holdings Ltd. announced on July 20 it has entered into an agreement with the Economic & Technological Development Zone of Xi'an city to invest US$100 million (EUR 82 million) in a brewing unit, named Kingway Beer Xian Company, in the western Chinese city.

The Hong Kong-listed Company made the announcement through a disclosure to the Hong Kong stock exchange, on which it is listed. Kingway said the project will include a brewing facility with a capacity of 200,000 metric tons (220,000 short tons) a year.

Construction of the first phase of the project with an investment of US$50 million and an annual production of 200,000 liters of beer will start in April 2006, and be completed in April 2007.

Upon completion of the second phase of the project, Kingway Beer Xian Company will boast an annual output of 0.4 million liters of beer. At its full production, the company will have an annual sales volume of 1 billion yuan (US$120 million) with 300 million yuan for tax and profit.

Xi'an is the capital city of Shaanxi province, home to one of China's most popular tourist sites: the terracotta soldiers, created more than 2,000 years ago for the tomb of China's first emperor.

Kingway Beer, a Hong Kong listed company, is a subsidiary of Hong Kong-based Guangdong Holdings Co. Ltd run by the Guangdong provincial government. Known for its brand, greed food and trademark, Kingway Beer now has five modern breweries, each with an annual output of more than 0.2 million liters.

Founded in 1993, Xian Economic and Technology Development Area in Xian, capital of Shaanxi Province, has attracted many investors to run their businesses there. In the first half of this year, 47 projects with a combined investment of 5.2 billion yuan were under construction in the area. Transnational companies such Cunmmis and ABB have also opened their firms in the development area.