Moutai to provide fuel to civil aviation industry

The Kweichow Moutai Group Co Ltd, which produces China’s national liquor Moutai, has invested 1.07 billion ($169 million) in Guiyang Longdongbao Airport Co Ltd in southwestern China’s Guizhou Province, becoming the holder of the second largest number of shares in the company, Shanghai Securities News reported on Tuesday.

Moutai is betting that the country’s aviation industry will expand. A series of policies was recently issued by the central government to stimulate the development of Guizhou’s civil aviation industry and to carry out a plan to make China a stronger player in the civil aviation industry.

Moutai’s investment is considered to be an important part in the company’s “100-billion Moutai” project, which is to bring the company 100 billion yuan in revenue by 2020.

Besides the aviation industry, Moutai has invested in the real estate industry and other industries. With its diversified investment, Moutai is also seeking to profit from sales of its liquor, its chief product.

The company recently announced plans to raise the prices of some its products by 20 to 30 percent on average, starting in September. This marks the first time that Moutai has raised its prices in more than one and a half years, Security Times reported on Tuesday.

In March, Premier Wen Jiabao pledged to ban the use of public funds in purchases of luxury items such as expensive liquor, a policy that has greatly affected sales of the liquor and the profits of big liquor producers such as Moutai.