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AB InBev won't sell Zhujiang Brewery

Anheuser-Busch InBev NV said it has no plan to sell its stake in China's Guangzhou Zhujiang Brewery Co Ltd despite a wave of asset sales worldwide to help cut debt when the Belgium-based InBev took over the American brewer AB.

Y. R. Cheng, president of AB InBev China, said the world's largest beer maker is not considering selling its 28 percent stake in Zhujiang Brewery. "It's a quite strong player with 40 to 50 percent market share in Guangdong Province," he said.

AB InBev is hoping to recoup US$7 billion from asset sales and issued bonds to help reduce debts after the brewer of Stella Artois and Beck's, bought Anheuser-Busch, which brews Budweiser, for US$52 billion last year.

In January, AB InBev agreed to sell the majority of its stake in Tsingtao, China's largest brewery, to Japan's Asahi for US$667 million. The deal, which allows Asahi to acquire 19.9 percent of Tsingtao and reduces Anheuser's stake to 7 percent, is still waiting for government approval. Cheng said no further assets sales in Tsingtao are planned now.

AB InBev also wants to continue its expansion in the huge growing market of China to offset slowing sales around the world because of the economic downturn.

AB InBev yesterday opened a 600-million-yuan (US$87.7 million) factory in Foshan City in Guangdong Province. The Budweiser (Foshan) Brewing Co Ltd will produce Budweiser and domestic brand Harbin, which it acquired in 2004. The brewery has a production capacity of 260,000 tons, with plans to increase that to 800,000 tons to meet demand in south China and Southeast Asia.

The China Alcoholic Drinks Industry Association said 41 million kiloliters of beer was sold here last year and sales are expected to grow 5 percent a year in the next decade.

Budweiser sales in China have been growing in double digits since 1995, Cheng said. AB InBev China has another plant in Wuhan, capital of Hubei Province, that produces Budweiser with an annual output of 500,000 tons.

AB InBev has 35 breweries in China, selling Budweiser and local brews such as Harbin and Sedrin.

Cheng said the brewery would focus on consolidation of local brands in China and will seek merger and acquisition opportunities in the highly fragmented industry, which has more than 300 small and medium-sized players.


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