(Yicai Global) Dec. 7 -- Leading Chinese liquor maker Kweichow Moutai Co. [SHA:600519] plans a CNY3.56 billion (USD538 million) investment to ramp up raw material output and expand liquor production and storage capacity in a bid to meet surging demand.
Kweichow Moutai will build 23 liquor-making facilities to boost annual production of its signature Moutai alcoholic beverage by 5,125 tons, the Guizhou province-based company said in a statement yesterday. It will also build 20 cellars to increase storage to 26,000 tons and eight plants to push raw material output to 7,168 tons a year. Construction will take place between May 2018 and May 2020.
Demand for Moutai, a baijiu or strong white spirit made from grain, has outstripped supply this year, with the price of a bottle jumping to CNY1,800 (USD272) from CNY1,200.
The company raised its 2018 sales target 7.7 percent to 28,000 tons based on this year's strong performance. Profit surged 60 percent to CNY19.98 billion in the first three quarters of the year, from last year. Revenue gained 59 percent to CNY42.45 billion.
Kweichow Moutai's board approved the expansion plans on Dec. 5.