Los Angeles, California, April 23, 1998 --- CBR Brewing Company
(OTC: CBRB), the leading foreign label beer producer and marketer
in China, today announced the acquisition of two breweries during
the course of the Company's first quarter ended March 31, 1998.
"These two acquisitions, which are expected to be accretive
to our earnings in late 1998, represent the type of transactions
that CBR Brewing is seeking in an effort to expand our company and
reward our shareholders," said Chen Zi Shou, President of CBR
Brewing Company. "Beyond the numerous initial operating efficiencies
and synergies that we have already achieved, both of these new breweries
will provide us with additional domestic growth avenues by opening
up new untapped markets to us and help us continue our growth in
China and beyond. We are excited about the new year and anticipate
continued steady growth through additional acquisitions and increased
sales of Pabst Blue Ribbon throughout China," said Mr. Chen.
Acquisition of Zao Yang High Worth Brewery
During the first quarter of fiscal 1998, CBR Brewing, through its
High Worth JV subsidiary, entered into a joint venture contact with
Zao Yang Brewery in Hubei province to establish a new brewery in
the province with an initial annual production capacity of 40,000
metric tons or 340,000 barrels of beer. The new brewery will be
designated Zao Yang Blue Ribbon High Worth Brewery Ltd. with a total
capital investment of $3,527,711, 55% allocated to High Worth JV
and 45% to Zao Yang Brewery.
Zao Yang High Worth Brewery will initially commence production
of a locally branded beer under the name "Di Huang Quan,"
subject to certain regulatory approvals expected to be received
shortly. This trademark will be transferred from Zao Yang Brewery
to Zao Yang High Worth Brewery once the joint venture commences
operation. High Worth JV will be responsible for transferring the
technical know-how and production technique of brewing Pabst Blue
Ribbon beer to Zao Yang High Worth Brewery, which may take approximately
six to nine months.
Zao Yang High Worth Brewery is situated on a site containing approximately
752,688 square feet and is located within the vicinity of Zao Yang
City, Hubei Province. Zao Yang High Worth Brewery occupies the site
pursuant to a certificate of land use rights issued by the local
government. The land use right is part of the assets acquired by
Zao Yang High Worth Brewery from Zao Yang Brewery.
The original facilities of Zao Yang High Worth Brewery were constructed
between 1980 and 1985 with annual production capacity based on old
brewing technology of approximately 40,000 metric tons or 34,000
barrels of beer per annum.
High Worth JV, pursuant to the joint venture agreement, will assist
Zao Yang High Worth Brewery in modernizing its brewing, technology
and renovating its existing equipment in order to convert the brewery
into another Pabst Blue Ribbon beer brewing complex.
Acquisition of Sichuan Brewery
Following an agreement reached on December 30, 1997, CBR Brewing,
through its High Worth JV subsidiary, has been in process of acquiring
an equity interest of 51% in Sichuan High Worth Brewery. As part
of this agreement, Sichuan Brewery will be restructured and renamed
as Sichuan Blue Ribbon High Worth Brewery E Mei Limited ("Sichuan
High Worth"). Guangdong Blue Ribbon and E Mei Brewery will
own the remaining equity interests in Sichuan High Worth of 20%
and 29%, respectively. E Mei Brewery is the local brewery in Sichuan,
which leased their brewing facilities to Guangdong Blue Ribbon to
form the Sichuan Brewery.
Sichuan Brewery is situated on a site containing approximately
1,089,000 square feet and is located within the vicinity of Le Shan
City, Sichuan Province, which is approximately 160 kilometers from
Chendu, the provincial capital of Sichuan Province. The original
facilities of Sichuan Brewery were constructed in 1988 with annual
production capacity, based on old brewing technology of approximately
20,000 metric tons or 170,000 barrels of beer. Prior to late 1996,
the facilities were used exclusively to produce beer under domestic
local brand names. Guangdong Blue Ribbon acquired the brewery as
its branch and started to convert the facility into a Pabst Blue
Ribbon beer brewing complex in late 1996. In April 1997, Sichuan
Brewery commenced to produce beer under the Pabst Blue Ribbon label,
which was sold to the Marketing Company for resale.
CBR Brewing is a US company whose subsidiary companies are engaged
in the production, distribution, and sales of Pabst Blue Ribbon
Beer in China, via license from Pabst Brewing Company USA. China
has recently become the world's second largest beer producer. Pabst
Blue Ribbon was first produced in China in 1990 and is now the second
leading premium beer in China behind 80 year old Tsing Tao Beer.
Pabst Blue Ribbon is the leading foreign label beer sold in China
today.
(Note: Statements in this press release which are not historical
may be deemed forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Although CBR Brewing
Company believes the expectations reflected in any forward-looking
statements are based on reasonable assumptions, it can give no assurance
that its expectations will be attained. Factors that could cause
actual results to differ materially from CBR Brewing Company's expectations
include completion of pending acquisitions, continued availability
of acquisitions, the availability and cost of capital for acquisitions
and for renovations, the ability to maintain existing licenses,
competition within the brewing industry, foreign exchange fluctuations,
China's economic conditions, and other risks detailed from time
to time in CBR Brewing Company's SEC reports, including quarterly
reports on Form 10-Q, current reports on Form 8-K and annual reports
on Form 10-K)
