India: United Breweries will invest US$87 million to expand capacity by half

United Breweries Ltd., India's top beer maker, is to invest about 4 billion rupees (US$88 million) to expand capacity by half, Reuters cited the Chairman Vijay Mallya saying at the annual shareholders' meeting on September 19.

The expansion will increase output from the current 68 million cases a year "in a phased manner", he said. "The (expansion) plan envisages both setting up of green-field breweries as well as augmentation of capacity and technology at existing sites," said Vijay Mallya.

"The company plans to invest four billion rupees (88 million dollars) in the manufacturing network over the next three years. This will be funded by a combination of internal accruals and debt," Mallya told shareholders. He said the company will open an office in Shanghai to market the firm's products.

"China is a vast country. All we know is that there is a market for our products. Initially we are only looking at marketing. United Breweries will open the office immediately," Mallya commented.

United Breweries leading beer brand is Kingfisher. The company is the world's third-largest spirits producer and controls 60 percent of the Indian market.

United Breweries is also firming a distribution agreement with joint venture partner Scottish & Newcastle Plc for UB's flagship beer brand Kingfisher in overseas markets including the UK, Mallya said.

Shares in UB, which has nearly half of India's beer market, jumped 20 percent to 145.10 rupees in a weaker Mumbai market. ($1=46.1 rupees)

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .