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Lion parent company Kirin has begun its KV 2027 strategy in an aim to secure long-term sustainable growth, by leveraging its core practices of fermentation and biotechnology. The company said strengthening its brewery is a key focus for the future, as it awaits completion on the divestment of the Lion Dairy & Drinks business.

At its investor day in Tokyo on 3 March, Kirin said it would create value for stakeholders and adapt to social and environmental changes surrounding its businesses.

Founded as a brewing business more than 100 years ago, Kirin has based the majority of its growth in the food domain, particularly in its expertise and developments of its fermentation and biotechnologies.

As part of its KV 2027 outlook, Kirin is targeting a CAGR of four to six per cent of consolidated normalised operating profits, where it will drive growth “by unlocking synergies across the food, pharmaceuticals and health science” areas.

The company will reform its Kirin Brewery business by targeting a normalised OP margin of 25 per cent (revenue excluding liquor tax) by 2027. It will “enhance the group’s brands and explore new growth engines”.

“In beer products, it will focus on developing its core brands to deliver long-term returns. Kirin Brewery will also focus on craft beer, non-alcoholic beverages and Japan whisky as new growth drivers,” the company said in a statement.

In November, Kirin announced it would sell the Lion Dairy & Drinks business to China Mengniu Dairy for $600 million, which was given the green light by the Australian Competition and Consumer Commission in February, but is still awaiting completion.

Kirin’s strategy to “abandon all non-beer businesses” in its KV 2027 plan aims to meet the company’s commitment “to growing the beer business but recognises the structural market challenges”.

At the investor day, Kirin also announced its environmental action plans, which includes Lion’s involvement in container-collecting services in all states where container recycle law is introduced, as well as becoming carbon neutral by the end of 2020, and ensuring the use of 100 per cent renewable energy by Lion by the end of 2025.

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