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Sept. 30 (NBD) -- Chinese liquor maker Kweichow Moutai Co Ltd (600519.SH) announced Friday its plan to invest up to 8.384 billion yuan (1.2 billion U.S. dollars) in a production expansion project.

The Guizhou-based liquor distillery said it will build a series of new facilities, aiming to double the annual capacity of its thick fragrant flavored variations to 60,000 tons.

This is not the first time that Kweichow Moutai has stated to uplift the capacity of variations like Moutai Prince Chiew.

Li Baofang, chairman of the company, mentioned at the annual general meeting of shareholders held in May this year that the planned annual output for original Moutai liquor and variations is forecasted to go up gradually to around 50,000 tons and 55,000 tons, respectively, in the next three years.

Kweichow Moutai's move to increase production capacity is driven by the strong market demand.

The company reported high growth in sales of variations in recent years. Last year, Kweichow Moutai sold 30,000 tons of variations, surging sharply from 7,826 tons for 2015. The metric stood close to 16,000 tons in the first six months of 2018, accomplishing 53 percent of the sales target for the whole year.

The liquor manufacturer expects the sales of variations for 2018 to hit 8 billion yuan (1.2 billion U.S. dollars), and 57 percent of that goal has been completed during the first half of this year.

It is noteworthy that since Li Baofeng joined Kweichow Moutai, the company had started focusing on the production and sale of variations.

However, Baijiu expert Jin Yufeng held due to fierce competition in China's mid-range liquor market where variations of Kweichou Moutai are situated, Baijiu maker hasn't yet gained a strong foothold in the field.

But Jin acknowledged that Kweichou Moutai variations would benefit from endorsement of the brand and enlarging market share of the overall variations sector. 

Email: zhanglingxiao@nbd.com.cn