Carlsberg has reason to cheer with Sichuan upgrade

Carlsberg has also increased its share in the Chongqing Brewery Co for a controlling stake. [Huo Huang / Asianewsphoto]

Carlsberg has signed a deal to invest 600 million yuan ($98.4 million) to upgrade production lines in Sichuan, representing a major drive to expand its market share in its fastest-growing market.

Jorgen Buhl Rosmussen, president and CEO of Carlsberg signed a deal with officials in Yibin to upgrade a major production line there. Another deal, with the Liangzhou government, will allow the company to have a barley supply base there. The two deals were signed at the ongoing 14th Western China International Fair.

The move followed a major investment last year to spend 5 billion yuan ($820 million) to build a brewery in Dali, Southwest Yunnan province, the single biggest investment by Carlsberg in China.

Carlsberg has also increased its share in the Chongqing Brewery Co for a controlling stake. These moves underscored the growing importance of the western China market for the Danish company.

Stephen Maher, CEO of Carlsberg China, told China Daily that the western China market is growing at three times the pace of the rest of China. He declined to specify the company's sale growth in western China but said it is more than double-digit.

"We see faster sale growth here than other region of the country," Maher said.

"As people get richer, they are looking for a better quality of life and more choices. Carlsberg is a company that has portfolio brands that best meet consumer needs, and that's why we are growing so fast."

Asked if slower growth in other regions is a concern, Maher said: "The growth is still 2 or 3 times that of other countries, so there are plenty of upsides for companies like Carlsberg. The slowing economy is not a problem as long as you have products that meet the needs of consumers."

Indeed, just three years ago, the company's sales in China were 10 million hectoliters, representing a small part of its global business. Now it has grown to over 40 million hectoliters, the fastest growth in the world.