China's prized Tsingtao Beer setting up here

Tsingtao Beer retains 40 per cent of Tsingtao Brewery Thailand, with 60 per cent owned by the Thais.

Investor Theparak Luengsuwan said Tsingtao planned to make Thailand its export-oriented production hub to penetrate Southeast Asia, Australia and Europe.

"It had been considering Thailand or Malaysia, but our lower logistic costs and tax benefits from the free-trade pact with Australia tipped the balance," he said, citing FTA tax-free imports of barley for re-export of finished goods to Australia.

Tsingtao has been importing all its barley from Australia and Canada since a quality debacle with Chinese barley heavily polluted by pesticides and chemical fertilisers in the late 1990s.

Theparak, who also is managing director of Cosnam Shipping, said the brewery would have total production capacity of 100,000 tonnes per annum with plans to boost this to 200,000 tonnes soon if it got a good response from the market. Eighty per cent will be exported.

Tsingtao is a premium brand, competing with Heineken, Singha Gold and Asahi.

The brewery is expected to be located somewhere on the outskirts of Bangkok.

Theparak said top executives from Tsingtao would meet Industry Minister Charnchai Chairungrueng during the Board of Investment's road show in China next month to confirm the investment plan.

Tsingtao was privatised in the early 1990s and in 1993 merged with three other breweries in Qingdao, the city in Shandong province it takes its name from in an earlier romanisation.

Today 27 per cent of the company is owned by Anheuser-Busch, the largest brewing company in the United States. It is sold in more than 50 countries and accounts for more than 50 per cent of China's beer exports.

Charoen Pokphand Group, the Kingdom's biggest agro-industrial conglomerate, is already a minority stakeholder in Tsingtao in China.