A coalition of around 30 coal mining entrepreneurs in Shanxi Province have injected 5 billion yuan ($735 million) into State-owned liquor producer, Xinghuacun Fenjiu Group. Fenjiu's production capacity will triple after the investment, according to Economy and Nation Weekly.

"Fenjiu Group is now building new production facilities, and the capacity is expected to increase sharply," said Zhang Weidong, a regional manager of Fenjiu Group in Shanxi Province.

"One black and one white" is the two pillar industries of the local economy. "One black" refers to coal, and "one white" refers to the white liquor, also known as baijiu. Weak development in the coal industry has encouraged the coal mine owners to turn their eyes to the booming liquor industry.

Xinghuacun Fenjiu was once the top liquor seller in China.

In the 1990s, when the market experienced a price increase in the liquor ingredients, Fenjiu went low-end strategy, while its major competitors, Maotai and Wuliangye, targeted at the high-end market sector instead.

The strategy did not pan out. In the mid 90s, Fenjiu's sales volume began to fall. "The company has slid from number one to number five," said Wang Jinmin, vice-president of the group, in an earlier report.

"Fenjiu is now making efforts to improve its product line. The company is considering re-positioning its brand.

The high-end market will be the future focus. 'Guocang Fenjiu' is a good example," said Zhang. "Guocang Fenjiu" was launched in 2004, which is targeted at the "super high-end sector", according to Zhang.

The liquor industry in China experienced a boom over the past few months. Baijiu products all saw major price increases.

"Fenjiu would further explore the market outside of Shanxi, and at the same time consolidate its current status in the province," said Zhang.