Australia: Extra brewing capacity increase for Lion Nathan's joint venture with Heineken
Lion Nathan's joint venture with Heineken in Australia is running ahead of plan, with the listed trans-Tasman brewer adding extra brewing capacity for the Dutch beer brand at the Lion plant in Sydney, New Zealand media communicated on May 04.
Lion chief financial officer Jamie Tomlinson said on May 03 the company was progressively adding capacity to the separate section where Heineken is brewed at the Lidcombe plant, which makes the Tooheys range of beers. "It's a nice problem to have," he said.
He declined to comment specifically on the financial performance of the Heineken Lion joint venture, but said the returns were better than those indicated in the financial accounts lodged with the Australian Securities and Investments Commission (Asic). "The joint venture is going well," he said.
The financial accounts lodged with Asic show Heineken Lion generated sales revenue of $A65.7 million ($NZ79m) for the 17 months ended September 30, 2005. The net trading profit was $A2.43m.
Tomlinson said those accounts did not reflect the actual profits being split between the two companies because of the way costs were being shared and other issues relating to the structuring of the entity.
Tomlinson is one of the directors of Heineken Lion, established in mid-2004 to give Lion a greater presence in the fast- growing premium beer sector.
Tomlinson said the premium beer market was showing strong growth as drinkers traded up to prestige brands. "It's where the market is moving to," he said.
Speculation has also arisen that Lion might be interested in New Zealand company Independent Distillers, which has now formally been put up for sale after the death in a helicopter crash late last year of Michael Erceg.
Independent Distillers has a large Australian presence and a manufacturing plant at Laverton, on the outskirts of Melbourne.
The Australian arm of Independent Distillers made a profit after tax of $A16.1m from revenue of $A202m in the year ended September 30, 2005.
Investment bank UBS has been appointed to assess ownership options for Independent, with market estimates putting the potential sale price at more than $A700m.
However, investment bank Goldman Sachs J. B.Were has estimated the business could fetch $A1.1 billion.
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