Baijiu enterprises are accelerating expansion. According to an announcement on Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) February 19, the company plans to invest 9.076 billion yuan in the construction of new production capacity.
More than Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , at the beginning of this year, Kweichow Moutai Co.Ltd(600519) , Wuliangye Yibin Co.Ltd(000858) and other leaders have also successively issued plans for production expansion or technological transformation, of which Kweichow Moutai Co.Ltd(600519) plans to invest 4.11 billion yuan to expand the production capacity of a series of wines; Wuliangye Yibin Co.Ltd(000858) plans to expand and transform the koji making workshop in two phases, with an investment scale of 2.75 billion yuan. The main construction contents include koji making workshop and relevant supporting facilities.
“With the expansion of Baijiu enterprises, especially the head enterprises, it will inevitably squeeze some brands in some areas or weaker brands. The development of the Baijiu industry will also tilt towards the big brands in the future. With the deepening of the big brands and the whole value chain, the brand profits will further increase.” Zhu danpeng, senior researcher of China Brand Research Institute, told the reporter of Securities Daily in an interview.
Meanwhile, in the context of large-scale expansion of Baijiu enterprises, Ouyang Qianli, founder of the Li Li media and wine industry researcher, reminded reporters: “the expansion of enterprises needs to have a clear and clear understanding of the market, so as not to expand the capacity to become a burden on the operation of enterprises.”
Baijiu enterprises accelerate expansion of
According to the announcement, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) the above investment project will last for five years, and the time span is from January 2022 to December 2026. It is expected that the annual production capacity of high-quality Luzhou flavor original wine will be 18000 tons, the annual production capacity of high-quality elegant Maotai flavor original wine will be 20000 tons, the reserve of semi open wine warehouse will be 80000 tons, and the reserve of taotan warehouse will be 210000 tons. At that time, the production capacity of koji making of the company will reach 102000 tons / year.
It is understood that Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) has an existing capacity of 27000 tons, while the high-quality capacity expanded in the next five years will increase by 38000 tons. According to this calculation, the capacity of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) will increase by 2.3 times.
Such a large-scale expansion of capacity is not uncommon in liquor making industry. In addition to the Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , Kweichow Moutai Co.Ltd(600519) and Wuliangye Yibin Co.Ltd(000858) of official expansion and expansion this year, Baijiu Baijiu has already made a lot of layout expansion in the past two years.
In 2021, Jiugui Liquor Co.Ltd(000799) once said that after the initial investment of 779 million yuan to build the phase I project of the third production area, the phase II project will be started again. The proposed investment amount is 1.5 billion yuan, and 7800 tons of base liquor capacity and 4000 tons of liquor storage capacity will be added. In addition, Sichuan Swellfun Co.Ltd(600779) said on the public interactive platform that the Qionglai project launched by the company in 2018 is expected to be completed and put into operation in 2023. After the completion of the project, it is expected to form a production capacity of 20000kl / a raw wine.
In addition, under the hot sauce and wine, enterprises have never stopped expanding the production of sauce and wine. Last year, Langjiu group announced that 40000 tons of sauce wine was officially put into grain and production, ushering in the highest production capacity in history. In addition, Guizhou anjiu also continued to expand its production and successfully became a “20000 tons of sauce wine club” in just one year.
For Baijiu market expansion, Cai Xuefei, general manager of Zhiqu consulting, told the reporter of Securities Daily: “The new round of expansion is actually based on the liquor making enterprises in the head, characterized by the representative enterprises in the core producing areas or the brand representatives of related categories. With the release of this capacity, China’s liquor consumption capacity will show a multipolar trend, that is, the capacity of Representatives relying on category representatives and production areas will expand further, not the famous Baijiu” and “non representative liquor companies”. Conventional capacity may shrink further. “
Cai Xuefei further stressed: “at the same time, we should also pay attention to that with the expansion of the new round of production capacity, Baijiu market will be further accelerated in the direction of diversification and branding under the stock market competition.”
can the large-scale expansion be “affordable”?
For the expansion of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) , the reporter noticed that the market is mostly concerned about the problem of overcapacity.
According to the reply of Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) to the inquiry letter of Shanghai Stock Exchange, the company currently has an inventory of about 90000 tons of raw wine (raw wine is calculated at 65 °), and the existing brewing capacity is 27000 tons (the supporting plant and equipment are complete and all owned). The total output from 2018 to 2020 is 19000 tons, 22000 tons and 25000 tons respectively, and the capacity utilization rate is 70%, 81% and 93% respectively. It is expected that the capacity utilization rate will be 95% in the next five years.
Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) said that the state of nearly full production should be a major motivation for this round of production expansion. In addition, the reporter saw on the open interactive platform that the impact of overcapacity on sales has also attracted the attention of investors.
Some investors questioned Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) that in recent years, many enterprises in Baijiu industry have expanded their production. After a few years, they may bring about overcapacity and affect sales. How does the company look at it? In response, Jiangsu King’S Luck Brewery Joint-Stock Co.Ltd(603369) responded that with the continuous upgrading of consumption, the trend of people drinking less and drinking good wine will become more and more obvious. In response to possible consumption reduction and overcapacity in the future, the company will continue to improve product quality and value, optimize product structure and meet consumers’ demand for good wine and fine wine.
\u3000\u3000 Chinese Baijiu production is actually not the focus of the past two years. Since 2016, the latest data of the last year have shown that the output of Chinese liquor has actually dropped by 47%. The fact that the decline in liquor production is actually a result of the intensification of industrial differentiation is that with the development of liquor consumption structure and the development of consumption branding and quality, the middle and low end liquor or Baijiu is still the main source of Baijiu. The production capacity of non famous wines dominated by low-priced wines is mostly surplus, while the production capacity of famous wines endorsed by the production area and high-quality wines represented by categories has been scarce. ” Cai Xuefei pointed out.
According to the data released by China Baijiu Association, in 2021, the output of Liquor Enterprises above designated size was 715.63 million liters, down 0.59% from the same period last year, compared with the 1358.36 kilo liters in 2016.
“With the gradual release of the capacity of China’s famous Baijiu, it is certain that the consumption price of Chinese liquor will be further increased, and the production capacity and quality of liquor will be further enhanced. This is also a result of the expansion of the high-end liquor market.” Cai Xuefei said, “under such a trend, we also call on Baijiu enterprises to increase production capacity and pay more attention to quality innovation and ecological construction in the production area, so as to promote the sustainable development of Baijiu’s higher quality.”
