Shaw Wallace and Co (SWC) has decided to double beer manufacturing capacity over the next three years.
The company, which at present has a total installed capacity of 11.5 million cases per annum, was urgently evaluating alternatives to raise aggregate production by at least 30 per cent per annum for the next three years.
"Our in-house production capacity together with the contract manufacturing capacity does not match the current demand for our leading brands, nationally. We are looking for new brewery licences. To meet the immediate spurt in sales we are also considering tie-up arrangements that may readily yield us the required volumes," said Ravi Jain, managing director, Shaw Wallace. The company owns seven breweries and already has tie-up manufacturing arrangements with three units. Shaw Wallace has wrested market leadership in Maharashtra, Andhra Pradesh, Uttar Pradesh, Orissa and Pondicherry where it runs its own breweries.
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Haryana Breweries, a unit acquired by Shaw Wallace in 1994, has been closed for over a year now due to imposition of prohibition in the state.
Two of the company's tie-up units are located in Karnataka while one is in Rajasthan.
"Under the tie-up arrangements, our technical teams help the contract manufacturer upgrade process and manufacturing standards and provide a buy-back assurance while we get ready capacity without any financial investment. We are considering collaborating with our contract manufacturers and other long-time business associates, suppliers and distributors in respect of our green-field brewery projects., Jain added.
A significant increase in sales volumes was seen in Andhra Pradesh, one of the largest beer markets in the country . The state government lifted a 30-month old dry law last April.
As per the data released by government agencies that regulate the sale of liquor and beer in the state, SWC commanded an overall market share of 28.4 per cent in the state, said Philip A B Sargunar, senior vice-president, Shaw Wallace. "Tamil Nadu and Madhya Pradesh are the other states where we are on the threshold of attaining volume leadership. Our three front-line brands, Haywards 2000, Haywards 5000 and Royal Challenge premium lager are all growing in excess of 40 per cent per annum.
In fact, Haywards 5000 has emerged the largest-selling strong beer in the country and the second-largest beer brand on the whole. This brand is all set to cross the three-million case mark this month," Sargunar added. During the five-month period between July and November, the company registered a cumulative sales increase of 46 per cent over the corresponding period, last year.
The overall market share has shot up from 16 per cent in 1996-97 to 20 per cent in the current year.
"Having identified it as our core business, we are determined to capitalise on every growth opportunity in the beer business," Jain said.