Snow Beer Acquires Henan’s Second Largest Beer Corporation Aoke Beer

The acquisition is the second of CR Snow's heavy punches to Henan's market, which comes a month after November 26th, when the foundations are laid to CR Snow's 200,000 kiloliters beer production project in Zhumadian, Henan.

1/14/2011 --- China Resources Snow Breweries (China) Limited (CR Snow) has completed the buyout of Henan Aoke Beer Industry Co., Ltd (Aoke).

The acquisition is the second of CR Snow's heavy punches to Henan's market, which comes a month after November 26th, when the foundations are laid to CR Snow's 200,000 kiloliters beer production project in Zhumadian, Henan.

Those in the field believe that as a leader of the Chinese beer industry, CR Snow's acquisition warrants attention in the recently active Henan market, as it is the first time a national beer brand has formally entered the Zhengzhou area in a large scale move, which is the centre of Henan's beer industry. It also signifies the unveiling of CR Snow's dominance in the Central Plains.

CR Snow expressed that it has acquired Aoke's three factories in Zhengzhou, Luohe, and Anyang, as well as the brewing assets. The annual production of the three factories total 290,000 kiloliters.More remarkably, upon the completion of the buyout, CR Snow will invest an additional RMB 400 million for large scale technological upgrades and relocation and expansion. Phase one expansions will bring a capacity of 400,000 kiloliters, significantly higher than the scale of the Aoke factory acquired. Along with the foundations laid in Zhumadian, the acquisition will increase the number of CR Snow's production headquarters in Henan to four, with a capacity of 600,000 kiloliters.

Aoke Beer is a widely recognized brand in Henan, excelling in terms of reputation, quality and sales teams when compared to the numerous beer corporations in Henan. Aoke's core factory in Zhengzhou lies in the city cluster of the Central Plains, which is the economical heart of Henan, which bears significant strategic importance.

Industry figures have shown that since it first entered the Henan market, CR Snow has maintained three years of steady and low profile market operation. With sales in Yudong reaching 200,000 kiloliters, it has continued to assume leadership in the local market, surpassing other top-end national brands in terms of sales in Henan, and accumulating operational experience in the diverse local market.

It is exactly with this accurate insight in the Henan market that CR Snow has swiftly set up a local strategy by way of a series of acquisitions and expansion of factories.

Henan is the most highly populated province in the country. Beer consumption is high, ranking second nationally. For many years, competition among the 40 strong local beer enterprises has been fierce, with chaotic price wars which not only make it difficult for the industry, but fail to satisfy the ever-rising beer consumption demands. The development of the industry has been below the national average.

Upon stepping up its domination in the Central Plains, CR Snow will deploy its efficient brand integration, technological and quality edge, first-class enterprise management and experience in market operations to propel the Yu beer industry out of its current difficulties."CR Snow will proactively take up the pivotal role of reshaping Henan's beer industry through the integration of resources and market expansion, creating an atmosphere of constructive competition and development." general manger Wang Qun of China Resources Snow Breweries (China) Limited stated, "The series of strategic moves in the Henan market are but the first steps of CR Snow's venture into the Central Plains."

Established in 1994, China Resources Snow Breweries (China) Limited is a national producer and seller of beer, with headquarters in Beijing. Its shareholders are CR Enterprise and SABMiller, the second largest beer enterprise in the world. CR Snow currently operates about 70 beer factories in China, with the CR Snow brand and over 30 local brands taking up 19.8% of China's business market. In 2009, CR Snow's sales amounted to 8.37 million kiloliters, with an annual growth as high as 15.3%, and corporate sales greatly surpassing other beer enterprises in the country for five years straight. CR Snow's brand sales increased further in 2009 to 18.8%, reaching 7.24 million kiloliters, thereby cementing its status as a leading beer brand in the world.