Cobra closes in on brewery buy

UK-based Cobra Beer is closing in on an acquisition of a brewery and has signed licensing agreements with two breweries in Orissa and Madhya Pradesh as part of its expansion plans in India.

"We are in a fairly advanced stage of negotiations with a standalone brewery for acquisition. Currently, due diligence is being carried out. It could be announced shortly," Cobra Beer founder and CEO Karan Bilimoria told PTI.

He declined to give details citing a confidentiality clause, but added the acquisition could "give us a capacity of three million cases straightaway, which could be further expanded".

Bilimoria also said the company has signed licensing agreements with two breweries in Orissa and Madhya Pradesh as part of its strategy to have an overall capacity of around 10 million cases by 2010.

"Since we are currently undergoing the initial run we are not in a position to name the two new partners," he said when asked about the two new licensees.

Already, Cobra Beer has licensing agreements with Mount Shivalik Group of Rajasthan, Impala Breweries in Goa, Manav Breweries in Uttar Pradesh and Iceberg in Bihar.

"The overall capacity we expect to have through licensing is around 5 million cases. With our Punjab greenfield plant coming up by next year, in three years time we should have a capacity of about 10 million cases," Bilimoria said.

Cobra Beer is already investing $50 million in the next three years for expansion in India, which is exclusive of its acquisition budgets.

He said the company was also planning for two more greenfield plants, one in Hyderabad and the other possibly in Maharashtra. The company may also enhance its product portfolio in future as it aims at a bigger market share in India.

"In the UK we have alcohol-free beer, low calorie beer and Cobra Bite, which is a natural fruit-flavoured beer. These are some products which could eventually find their way to India," he said.