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Saturday, Nov 25, 2006

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SAB Miller plans capacity expansion

K. Giriprakash

To involve investment of about Rs 200-250 crore

Growth plans
The new projects could involve an investment of about Rs 200-250 crore.
Foster's is expected to add 4.5 million cases every year.
Market share to be up at around 37 per cent

Bangalore , Nov. 24

Beer maker SAB Miller is eyeing the top slot in the market as it is said to be firming up plans to expand capacities through four big projects.

In another development, the beer maker has just completed the integration of Foster's with itself.

Sources close to the company told Business Line that four more big projects are expected to roll out in another six months, which will add another 4.5 million hectolitre capacity. This would be through a combination of greenfield projects and brownfield expansion of the existing breweries.


The new projects could involve an investment of about Rs 200-250 crore.

Sources said a decision on which of the breweries will be expanded and in which States the new breweries will be set up will be taken shortly. Typically, the new breweries will take at least 16 months to go on stream.

Sources said Foster's is expected to roll out from around 10 breweries of the company. Foster's is expected to add 4.5 million cases every year, which will take SAB Miller's production to 35 million cases annually. Over the past one year, SAB Miller has more than doubled its capacity, sources said.

The existing breweries in Aurangabad, Haryana and Rajasthan are already being expanded.

The Aurangabad breweries, which recently underwent the first phase of expansion, are now being expanded further. The expansion and modernisation process is expected to be completed by Feburary.

The expansion of the Haryana brewery is expected to be completed by January next year while that of Rajasthan will be completed by May. SAB Miller currently has nine of its own breweries and two more on contract.

The Mohan Breweries in Chennai and the Tripti Brewery in Madhya Pradesh are on contract.

Once the nationwide launch of Foster's happens, SAB Miller is expected to add 2 - 3 per cent more to its market share, which will then be around 37 per cent.

If it bags the Mohan Meakins brewery business as well, the market share could go up by another 6 - 8 per cent.

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