Vijay Mallya-owned United Breweries is set to increase its manufacturing capacity by about 15 per cent over the coming months.
The country's largest brewer plans to do this both by expanding capacity at existing breweries and through Greenfield breweries, Mr A.K. Ravi Nedungadi, President and CFO, UB Group, told reporters after the company's annual general meeting on Wednesday.
Scope for growth
“The brewing industry is seeing very fast growth in India and demographics support growth,” he said. “India today remains the only country in the world where quantum of spirits sold is higher than beer. So there is scope for strong multi-digit growth in the future,” he added.
To make continuous investments in the manufacturing and sourcing ends of our business, the company will make investments exceeding Rs 1,000 crore over the next four years, the UB Group Chairman, Mr Vijay Mallya, has said in the company's annual report.
Greenfield units
The company is setting up two Greenfield breweries — one near Mysore in Karnataka and the other in Patna. According to the company annual report, the brewery in Karnataka is expected to be commissioned in the next financial year and land acquisition for the brewery in Patna is completed.
The new breweries, each with an initial capacity of 0.8-1 million cases per month, will produce all of UB's brands including Heineken, a company official had earlier told Business Line . After the expansion, the total capacity of the breweries will go up to about 16 million cases a month from 12.6 million cases a month capacity now.
This apart, the company has augmented brewing capacity through amalgamations of its associate companies – UB Nizam, CBPL and UB Ajanta Breweries that operate in Andhra Pradesh, Tamil Nadu and Maharashtra, the annual report says.
“While the scheme for merger of UB Ajanta is pending approval by BIFR, the company has secured capacity by executing a management agreement,” the annual report says.
United Breweries this year has posted its highest ever volume growth of 23 per cent by selling over 125 million cases to acquire a 54 per cent market share in India.