Anheuser-Busch to Relocate and Expand Tangshan Brewery

04/04/08 Anheuser-Busch will build a new brewery in the Fengnan District of Tangshan to replace a smaller downtown brewery. The move supports the local government’s efforts to relocate industrial facilities outside the city and redevelop Tangshan’s downtown into a more residential and commercial area.

“Anheuser-Busch has a long-standing commitment to support the communities where it operates,” said YR Cheng, president, Anheuser-Busch China. “The local government asked us to support efforts to redevelop downtown Tangshan by relocating and expanding our existing brewery. We worked together to develop a plan that benefited the Tangshan community and Anheuser-Busch’s business.”

Scheduled for completion in late 2009, the new Tangshan brewery will be built on a 160,000 square meter site and cost $49 million (346 million RMB) for the first phase. The facility will have an initial production capacity of 3.1 million hectoliters (2.6 million barrels). After the project is completed, the old Tangshan brewery will be shut down and the site will be prepared for future residential or commercial development.

“Tangshan is a growing city and continues to attract more tourists and investors each year,” said Li Zhong, governor of Fengnan District, Tangshan Municipal People’s Government. “Our goal is to change the city’s landscape by creating a downtown that welcomes residents and tourists. Anheuser-Busch’s willingness to relocate its brewery allows us to carry out this long-term development plan to help the city reach its full potential and become a model Chines.

A new, larger Tangshan brewery will support Anheuser-Busch’s growth in China, which includes the Budweiser family of brands as well as the Harbin and Tang beers.

“The support of Tangshan Municipal and Fengnan District People’s Government for the Harbin brands has played an instrumental role in the beer’s success in the Hebei province,” said Cheng. “This strong relationship between Anheuser-Busch and the local government will serve as a foundation for future growth in Tangshan and throughout China.”

In 2004, Anheuser-Busch acquired Harbin Brewery Group and its 13 breweries. Harbin is China’s oldest brewery, founded in 1900, and holds a leading position in Northeast China.

Anheuser-Busch first invested in China in 1993, when the company made a minority investment in Tsingtao Brewery Co. Ltd. Today, Anheuser-Busch owns 27 percent of Tsingtao and shares best practices with the Chinese brewer in areas including production technology, marketing, sales and management.

In 1995, Anheuser-Busch established its first brewing facility in China in the city of Wuhan. Relying on strong consumer demand for Budweiser, the Wuhan brewery has quadrupled its original capacity to 4.5 million hectoliters (3.86 million barrels). Today, Budweiser continues to be the best-selling beer in China’s super-premium category.

Last year, Anheuser-Busch announced plans to build a new brewery in Foshan in the Guangdong province. The greenfield brewery, Anheuser-Busch’s first outside the U.S., will be completed in late 2008.