One of China's leading wine makers, Dynasty Fine Wine Group,
will invest HK$360 million (US$46 million) to boost production to
70,000 tons a year by the end of 2008, up from the current 50,000
tons, a company executive said.
"We will do it by expanding our current plants and acquiring
competitors," Dynasty's deputy general manager, Liu Jicheng, told
China Daily.
The plan will be financed with money the firm raised through a
Hong Kong initial public offering last year. Dynasty received a
total of HK$700 million (US$87.5 million).
The wine maker, 26.27 percent owned by French spirits maker Remy
Cointreau, produces most of its wine at its 115,000-square-metre
Tianjin plant. It recently opened another plant in East China's
Shandong Province, but Liu declined to reveal its capacity.
Liu said the company will invest HK$340 million (US$44 million)
extra in expanding its sales network, with South China's Guangdong
Province its first target market.
At present, Dynasty's 200 sales points are mainly in East China,
including Jiangsu Province and Shanghai. It also has a presence in
Hong Kong, where its wine has been sold in three Jusco stores since
January.
But that is far from enough, Liu said. "We have to expand, as
rivals are showing their teeth."
Dynasty's expansion plans come amid stiff competition in the
mainland's wine market, with major makers all announcing an
increase in output.
In January, COFCO International, the Hong Kong-listed arm of
China's largest grain trader China National Cereals, Oils and
Foodstuff Corp, said it would set up a 100-million-yuan joint
venture winery in Shandong. It will produce wine for more
discerning consumers. COFCO's Great Wall wine sells well at the
cheaper end of the market.
The top four Chinese wine brands Changyu, Great Wall, Tonghua
and Dynasty have about 60 percent of the mainland's fragmented wine
market, where 500 local makers compete.
(China Daily March 8, 2006)