Heineken NV’s Asia Pacific Breweries announced setting up of a JV with Jaipuria Beverages & Food Industries for a greenfield brewery.
MUMBAI: International brewer Heineken NV’s Asia Pacific Breweries (APB) venture made its second investment in as many months in this country, when it announced that it will set up a joint venture with Jaipuria Beverages & Food Industries for a greenfield brewery in Andhra Pradesh.
The international brewery major said APB will own 67% of Pearl Breweries the new joint venture that the Heineken unit is setting up with Jaipuria Beverages. It is speculated that APB may initially introduce Tiger beer in India, a brand launched in 1932 and a best-seller in south-east Asia. The other leading brand in APB’s portfolio is Anchor beer.
The Indian partner is the biggest soft drinks maker, and has been eyeing acquisitions in the beer segment for some time now.
“They want to make their presence felt quickly,” says an observer tracking the Dutch brewer’s moves in India. The new brewery at AP, is expected to start production by end-2007, and is estimated to cost Rs 69 crore.
It will build a greenfield brewery with an initial brewing capacity of 250,000 hectolitres just outside Hyderabad. The brewery is expected to commence operation by end 2007.
Significantly, APB’s move comes close to the May 2, 2006, deal last month, when the regional unit of the Dutch brewer acquired a 76 % stake in Aurangabad Breweries for about Rs 83 crore.
APB’s move into this part of the world comes after acquiring a 60 per cent stake in a Sri Lankan brewery in September last year. It also has recently announced plans to build a brewery in Mongolia.
By moving quickly to wrap up another deal in the country, this time with a leading bottler for beverages, the foreign brewer has clearly revealed its serious intent to make its presence felt in one of the fastest growing beer markets in the world.
India’s beer market has been growing at a compound rate of more than 7% cent annually and growth is expected to accelerate, as deregulation gains momentum across the Indian states.
The logic behind the Dutch brewer’s move to enter into Maharashtra and Andhra Pradesh is clear. “Andhra Pradesh and Maharashtra are known to be beer guzzling states and are the most lucrative brewery territories in the country,” the observer added.
Once the projects are in stream, it will in no time catapult APB as one of the leading players in the Indian market. While the total beer consumption is only around 8 million hectolitres per annum, which is less than 1 litre per capita.
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