Kweichow Moutai Co Ltd, China's most well-known premium liquor manufacturer, plans to invest 845 million yuan (US$108 million) to expand production capacity by 2,000 tons.

The company expects to reap more than 300 million yuan of net income annually through this expansion. The liquor firm, which did not reveal its current output, expects the expansion to boost sales revenue to more than one billion yuan annually.

It is said Kweichow Moutai sees market demand now exceeds supply for its liquor even though its price is more expensive. Although the competition in the premium liquor section is intense, there are now no other brands that could compete with Kweichow Moutai.

Hailed as the national liquor, Kweichow Moutai is largely consumed as a luxury gift or served during social occasions. Group purchasing from government and military officials takes a large part of Moutai's sales amount. Besides, brewing of premium liquor is very demanding and this characteristic also supports Maotai's ability to maintain high price (for the liquor).

Kweichow Moutai raised its retail price early this year to over 400 yuan (US$51) per 500 milliliters. An industry insider says the liquor producer may see net profit grow 20 percent this year because of the price rise.

Source:佚名