Carlsberg targets China growth with new giant brewery

Carlsberg has unveiled plans to build a new $670.42 million brewery in the south western Chinese province of Yunnan. 

The deal, which will be formally signed by Chinese president Hu Jintao during a state visit to Denmark on Friday, will establish  Carlsberg's second largest brewery. The new brewery, which will have an annual capacity of 10 million hectolitres per year by 2025, will only be eclipsed by the Danish beer giant's Baltika site in Russia. 

"The brewery will be gradually built over a period of time to suit China's growing demand for beer in the future," said a Carlsberg spokesman.

 China's beer market is more than twice the size of the world's second largest market, the United States, and is expected to grow by 5% annually - more than double the global average in 2011.  

Carlsberg is looking to strengthen its foothold in emerging markets such as China, India and Vietnam after its profits in eastern Europe nosedived by 98% primarily as a result of tax hikes, higher costs and public health initiatives in Russia. Asia now accounts for 11% of the firm's revenue.

Carlsberg already has 41 fully owned and partnership brewing operations in western China but it lags behind other domestic and foreign beer producers in terms of market share. Local players ..... Currently control around 60% of the Chinese beer market. 

Production of the firm's Carlsberg and Tuborg brands will commence at the site in 2014.