Wine maker aims for global clout
By Qiu Quanlin (China Daily)
Updated: 2006-03-30 07:02

Chinese wine maker Changyu Pioneer Wine Co Ltd, ranked among the top 20 brands internationally, has set a goal to become one of the top 10 brands in the global market by 2008, a top executive with the company said.

In order to achieve the target, the winemaker will expand its vineyards and focus on its high-end wine production, while also co-operating with foreign brands and strengthening its new international trading company.

With an investment totalling 200 million yuan (US$24.7 million), Changyu will expand its vineyards within the next three years, said Zhou Hongjiang, the company's general manager.

"As part of efforts to develop an international brand, the vineyard expansion aims to optimise grape species for increased and improved supply for wine, thus to produce high-end wine," Zhou said.

The vineyards will be expanded to 120,000 mu (8,000 hectares) in East China's Shandong Province and Ningxia Hui Autonomous Region in Northwest China, Zhou said.

The company has already developed a vineyard of about 50,000 mu (3,333 hectares) at its headquarters in Yantai in Shandong Province, and has other grape supply sources.

Zhou maintains high-end wine is an important growth engine both in the domestic and international markets, saying his company will keep absorbing new ideas and advanced technology to strengthen its competitiveness.

"The Chinese wine industry sees vast growth potential for high-end products in the near future, and in the international market," Zhou said, adding that wine production volume in the domestic market is expected to reach 800,000 tons, half of which is high-end.

To meet this market demand, the company plans to co-operate with wine companies from Italy, the United States, France and Portugal to set up an international company in Beijing and forge co-brands with the Beijing-based Diaoyutai State Guesthouse, to develop high-end brands this year.

Meanwhile, Changyu set up an international wine trading company called Changyu Pioneer International Wine Co Ltd in Yantai early this month, to introduce and sell high-end brands from overseas countries.

"Foreign brands will help Changyu better enter the high-end market both in domestic and overseas countries," Zhou said.

Changyu wine has been sold in more than 500 large and medium-sized cities in China and exported to at least 40 countries and regions in the world.

"We are investing more this year to cultivate the international market," Zhou said, adding that his company will invest about 100 million yuan (US$12.3 million) more than last year in the international market.

Changyu brought in more than 3 billion yuan (US$373 million) in sales revenue last year, an increase of 25 per cent over the previous year, company sources said.

The winemaker took a 20 per cent share of the Chinese market in terms of sales revenue last year.

"With a history of more than 100 years, we have reaped a bigger share in the domestic market," said Zhou.

The company's sales revenue is expected to reach at least 5 billion yuan (US$616.5 million) by 2008, Zhou said.

(China Daily 03/30/2006 page11)

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