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)