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Far Eastern to sell beer to Chinese

Following the acquisition of a Chinese brewery last month, Far Eastern Textile Co (遠東紡織), the nation’s largest textile maker, plans to start selling beer in China this summer, a Chinese-language media report said yesterday.

Far Eastern Textile said it invested a total of US$12 million in Chung Bi Beer (中比啤酒), a brewery in Suzhou, which produces both self-branded beer and sells polyethylene terephthalate (PET) beer bottles, a company filing with the Taiwan Stock Exchange at the end of last month said.

Prior to Far Eastern Textile’s investment in the Chinese brewery, the company had invested US$98 million in a bottle-grade PET chip plant in Suzhou last year, with an estimated production capacity of 280,000 tonnes. The company expects the plant to start mass production this quarter, the China Times reported.

With the company now having the capability to produce beer and beer bottles, Far Eastern Textile could start selling beer in China as early as this summer. However, the name of the company’s self-branded beer has yet to be decided.

TIMING

Far Eastern Textile said this year was the best time to tap into the Chinese beer market as beer consumption has been climbing and will increase during the Olympic Games in Beijing.

Market estimates showed that Chinese consume on average 35 million tonnes of beer annually.

Far Eastern Textile estimates that the company could produce up to 560 million beer bottles a year if production at its plant reached full capacity at 280,000 tonnes, the report said.

BOTTLES

Estimates show that if each beer bottle were sold for 4 yuan (US$0.57), Far Eastern Textile could generate revenues of more than NT$10 billion from selling beer bottles alone.

The global beer bottle market has an annual production volume of 100 million tonnes, equivalent to at least NT$100 billion (US$3.3 billion) in business opportunities. However, PET bottles for beer packaging only account for 2 percent of total production.

Far Eastern Textile’s new investment nevertheless has tremendous room for growth, especially amid growing advocacy for environment-friendly PET bottles, the report said.

FUTURE

Far Eastern Textile, a subsidiary of Far Eastern Group (遠東集團), was established in 1954 and was listed in 1967. Aside from the manufacturing of polyester fiber, woven fabric and clothing, the company also produces PET bottles, plastic sheets and industrial fiber.

In recent years, Far Eastern Textile has sought to transform itself into an industrial holding company and has plans to change its name, the report said, adding that the company would then divide into the textile, property development and reinvestment business sectors.

Far Eastern Textile shares rose 1.71 percent, or NT$0.9, to close at NT$53.5 on the Taiwan Stock Exchange on Friday.


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