UB group plans 4 breweries in organic plan

The new plants will be located in Rajasthan, Orissa, West Bengal and Uttar Pradesh. Two of these will be set up by United Breweries and two by Millennium Alcobev.

Millennium Alcobev (MABL) is a 40:40:20 joint venture between United Breweries, the UK-based Scottish & Newcastle and MABL managing director Ravi Jain.

Speaking with Business Standard, Jain said, "The decision to invest in greenfield breweries has been taken following an internal evaluation by the group. We feel that these projects are more viable than acquisitions considering the falling implementation costs."

MABL will be investing around Rs 52 crore in greenfield breweries.

MABL will be also investing around Rs 27 crore in upgrading the existing five breweries namely Inertia in Maharashtra and Haryana, two breweries in Tamil Nadu and Kerala acquired from Empee Breweries, and one brewery acquired from GMR Beverages and Industries of Andhra Pradesh.

The establishment of breweries in Rajasthan and Orissa will be undertaken by MABL, while United Breweries will invest in Uttar Pradesh and West Bengal.

MABL enjoys a 7 per cent market share in the Indian strong beer market and has national brands such as Zingaro and Sandpiper and regional brands such as Bullet, Kalyani Strong, Marco Polo, Turbo, Guru and Charger among others. The company will be re-building its flagship brand Zingaro, which has witnessed a slip in market share.

The Indian beer sector has seen hectic merger and acquisitions activity recently, with 12 breweries changing hands in the last three years. The Indian beer market was estimated to be 6.7 million hecto litres in 2002-03.

The UB group is the leading beer player and controls over 50 per cent of the brewing capacity in the country.