The Bhopal-based beer maker is looking at capacity expansion, acquisition of a brewery and setting up of a greenfield plant, in the next two years time.
Will acquire brewery and set up a greenfield plant in the next two years
MUMBAI: Som Distilleries and Breweries Ltd (SDBL) is on an aggressive all-out expansion spree. The Bhopal-based beer maker is looking at capacity expansion, acquisition of a brewery and setting up of a greenfield plant, in the next two years time.
This is aimed at making SDBL the third largest beer player in India, behind United Breweries and SABMiller. The company is a small player in the beer segment, holding a meagre 4% share in the Rs 4,000 crore beer market in India.
SDBL is doubling up its bottling and brewing capacity at its Madhya Pradesh plant. “Our capacity will rise from the current 3.6 million cases per annum to 7.2 million cases for the year 2008-09,” says Arora.
According to CMD Jagdish Kumar Arora, the low per capita beer consumption in India is an incentive to venture on an expansion. “Per capita annual consumption of beer in India is around 4.5 litres. It is very low compared to places such as China (20 litres) and Europe (45 litres). This will provide scope.”
He said the expansion of bottling capacity would cost the company Rs 29 crore, which would be funded partly through internal accruals and partly by taking loans from banks.
Is the second part of its overall expansion, SDBL is planning to acquire a manufacturing plant in Maharashtra this fiscal, which, Arora says, would add Rs 100 crore to its current turnover of Rs 120 crore.
The third aspect of its expansion drive would be setting up of a Greenfield brewery near Hyderabad that would produce 3.2 million cases annually. “We will invest Rs 50 crore for this facility, which will start operations from the summer of 2010. The funding would be a mix of debt and equity,” says Arora.
SDBL is aiming at more than doubling its 4% market share in the beer market. “We are hoping to reach 10% in fiscal 08-09 and 20% by 2010-11 across the country. This will be driven by our new Hyderabad plant and the we will acquire one in
Maharashtra.”
g_priyanka@dnaindia.net
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