Baltika Brewery, the key Russian holding of Carlsberg and Scottish & Newcastle, said on March 31 it was opening a plant in Russia's far east to tap a vast Chinese market over the border, according to Reuters. "On the 11th, we are going to be opening a plant in Khabarovsk," Baltika president Taimuraz Bolloyev told reporters gathered at his glistening, modern flagship brewery in an otherwise drab industrial suburb of St Petersburg.

Bolloyev said the factory in the far eastern provincial capital, just a few miles from the Chinese border, would become a staging post, providing a distribution link for a market nearly as large as all of Russia with its 144 million population.

It will be Baltika's fifth -- adding to a network in St. Petersburg, in Tula south of Moscow and still further south in Samara and Rostov-on-Don.

The Khabarovsk project will open at a time when another investment, aimed at launching the No. 1 Russian brew on foreign markets, is floundering. Bolloyev said the company was trying to salvage a project launched in 2001 to start production at the Krinitsa state brewery in Belarus, but officials in the former Soviet republic had pulled out of the project without explanation.

Bolloyev's Baltika is the most aggressive of the Russian brewers in seeking export markets and the outspoken brewery chief has used his visible position to become the Russian brewing industry's chief lobbyist.

He has spoken out against excise increases he sees as damaging to the industry and promotes Russian brewers' export potential. "We have problems so far with exports and that's why we favour quick Russian membership of the World Trade Organisation.

The brewery is also a linchpin of its shareholders' growth strategy, as Carlsberg and other European brewers turn to Russia for growth as their home markets saturate and decline.

Baltika executives announced approval of 2002 dividends of 9.32 roubles ($0.297) per ordinary share after a profit increase to $137.05 million in 2002 from $129.03 million the previous year.

Among the trends Baltika is following at home, Bolloyev said non-alcohol beer was proving more popular among Russians, with the brewery unable to meet consumer demand.

"We are surely a phenomenon to be followed here," he said.

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