Date:03/07/2006 URL: http://www.thehindubusinessline.com/2006/07/03/stories/2006070303300200.htm

Back Asia Pacific plans to set up greenfield brewery in AP

Our Bureau

Joint venture with Jaipuria Beverages & Food Industries to go on stream by end-2007

Hyderabad , July 2

Singapore-based Asia Pacific Breweries Ltd (APB) plans to set up a greenfield brewery in Andhra Pradesh, through a joint venture partnership with Jaipuria Beverages & Food Industries Private Ltd ("Jaipuria"), which is associated with the Jaipuria Group, one of the largest manufacturers of soft drinks in the country.

The new joint venture company of which APB holds the majority stake of 67 per cent, is called Pearl Breweries Private Ltd (PBPL). It will build a greenfield brewery with an initial capacity of 2,50,000 hectolitres just outside Hyderabad. The brewery is expected to commence operations by end-2007.

The initial investment in PBPL is estimated to be $15 million, out of which the equity contribution is estimated to not exceed $10 million, which will be contributed by APB and Jaipuria in proportion to their respective shareholdings.

APB's contribution will be funded through a combination of internal resources and external borrowings.

The joint venture marks APB's second investment in India, which follows its investment in Aurangabad Breweries Ltd in May 2006, according to a press release here.

Mr Koh Poh Tiong, Chief Executive Officer, APB said, "India is a rapidly expanding economy and it presents exciting growth opportunities for APB.

Andhra Pradesh is the fifth largest State in India. It also doubles up as the major link between the north and the south of India and this makes it a highly valuable and strategic geographic location for APB to build our base."

Andhra Pradesh makes up some 16 per cent of the country's total beer market of around 8 million hectolitres per annum.

The beer market is set to look up, mainly led by the thriving economy which has been growing at a compounded rate of over 7 per cent annually, the release said.

Mr Koh said, Jaipuria, a key player in India's F&B industry will bring to the partnership its extensive network in the industry and valuable local market insight.

"With our portfolio of over 40 beer brands and variants including award-winning Tiger as well as Heineken and Anchor, we look forward to providing the discerning consumers in Andhra Pradesh, our best brand offerings.

Also, APB will be able to exchange technical and marketing experiences with our counterparts in India," he said.