India: UB to set up the first brewery in N-E states

The beer industry’s march to the North-East (N-E) is gaining momentum. The industry leader, United Breweries (UB), has forged a strategic arrangement with a local business group in Assam leading to the setting up of the first brewery in N-E at Guwahati, The Economic Times posted May 31.

A few standalone breweries have come up in the eastern markets like Jharkand and Orissa in the recent past, but UB's plans for a manufacturing footprint in the N-E is a clear indication of the domestic beer industry taking that market seriously.

The beer sales in the seven N-E states, growing at robust double-digits, is projected to be in the 6/7 million cases band by the end of FY'07. The overall domestic beer depletions touched 107 million cases in FY'06 reporting 14% jump year-on-year.

UB has struck a buyback arrangement with the Guwahati-based Rhino Agencies, which is setting up a greenfield brewery. The plant, Rhino Breweries Pvt Ltd, will have an initial monthly capacity of one lakh cases, which could be ramped up to over two lakh cases subsequently.

The project, in the initial phase, is expected to see investment of Rs 24/25 crore. The investment will come from Rhino's promoter RN Nobis and three other partners with UB providing the technical support for the venture.

The brewery is expected to become operational by July 2007. UB, which reportedly accounts for 60% of the beer consumption in the N-E, serviced the region from its Kalyani brewery in West Bengal.

Incidentally, the second largest domestic brewer, SABMiller, has also looked at filling the manufacturing void in the N-E in recent times. SABMiller supports its east and N-E operations from the East Coast brewery in Orissa.

The Sikkim-based Yuksom Breweries, controlled by Bollywood star Danny Denzongpa, has also unveiled plans for a greenfield plant in Assam to bolster its presence in the N-E markets.

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