Asia Pacific Breweries (APB) is to set up a brewery in Mongolia in 18 months time. The company said it will brew Tiger Beer for the market.

The brewer has entered into an agreement with the MCS Group for a greenfield project to build a 300,000 hectolitre brewery.  The move comes on the back of APB's acquisition of a 60% stake in a brewery in Sri Lanka in late September 2005.

The joint-venture, MCS-Asia Pacific Brewery LLC (MCS-APB), is 55% owned by APB while MCS owns the remaining 45%. The brewery is expected to cost an estimated US$15m and will be funded by a combination of equity, which will be contributed by shareholders in proportion to their shareholdings and borrowings.

"MCS-APB represents APB's maiden equity investment in Mongolia. The investment is consistent with APB's regional expansion strategy to develop greenfield brewery opportunities and acquire strategic interests in domestic breweries within selected markets to create defendable and profitable businesses. Mongolia is amongst the emerging markets that APB has identified for growth and the partnership with MCS has given APB access to the growing Mongolian beer market," said Mr Koh Poh Tiong, chief executive officer, APB.

"Our investment is part of our continuous search for new markets to brew Tiger Beer, our flagship brand.  Upon completion of the brewery, Mongolia will be the eighth country to brew Tiger Beer, joining the ranks of Singapore, Malaysia, Thailand, Vietnam, Myanmar, Cambodia and China. To realise our vision of turning Tiger Beer into a pan-Asian beer that is widely brewed and enjoyed throughout this part of the world, we shall persist in our efforts to introduce the brand into as many pan-Asian markets as possible with an ultimate goal to brewing it in each market," he said.

Tiger Export Pte Ltd (TEPL), the export subsidiary of APB, has been exporting Tiger Beer to Mongolia for 13 years.

Around 250,000 hectolitres were sold in the Mongolia beer market last year, with a per capita consumption of 10 litres.

"MCS-APB will be concentrating our marketing efforts on developing the beer market.  To extend the reach of Tiger Beer in the Mongolian market, we shall be tapping into MCS' extensive distribution network and expertise in this area. By building a greater awareness of our beers over the next 2 years, we shall ensure that there is greater demand for our brands by the time the brewery is ready for commercial production," said Koh.