NEWSFLASH

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LUCIO TAN BUILDING CHINA BEER EMPIRE

Shanghai, Jan. 24, 1998 - Asia Brewery Inc. of the Philippines will buy Shanghai Beer Factory, marking the first time that a foreign brewer secured a controlling stake in a Chinese brewery.

Asia Brewery, owned by magnate Lucio Tan, will invest US$12 million and take a 90% interest in Shanghai Beer. Its four-year-old partner, Suzhou Wujiang Beer, will pay $900,000 and take the remaining 10 percent. Under Chinese regulations, foreigners aren't allowed to hold a 100 interest in local beer companies.

The sale includes existing production facilities and 13 brands of Shanghai Beer. As part of its strategy, Asia Brewery will also buy Xiamen Brewery in China's eastern Fujian province.

"Asia Brewery's strategy is to build up a series of breweries in Chinese coastal cities," said Cai Yunlong, a management supervisor at Suzhou Wujiang.

Asia Brewery officials admit that investing in Chinese breweries is a long term project, with estimates of as long as ten years before seeing positive results.

"China's beer market is now the second largest in the world and it will become the largest by the year 2000. We want to have a part in it," said Mok Pui Hong, an official of Asia Brewery.

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