Baltika Breweries today (15 May) signed a contract with Brasseries Internationales Holdings (Eastern), for the purchase of Baku-Castel brewery.

The deal, which will come into force upon approval from the anti-monopoly authorities of Azerbaijan, was made in a bid to develop the company's business in the country.

"We were led to the decision to make this purchase by an optimistic estimate of the prospects for developing the market in Azerbaijan, by the favourable investment climate and the strong position of the Baku brewery and its brands on the market," said president of Baltika Anton Artemiev.

Upon completion of the deal, Baltika will continue the development of the Baku-Castel brands including Castel and Hirdalan, and will develop a programme for modernising the existing equipment.

The company has plans to start producing its own brands there in time for the 2009 season.

"Baltika has set up the production of licensed brands at its own breweries and has arranged for licensed production of its brands in Ukraine and in Great Britain. Now we will add to this experience practice in managing production abroad," said Artemiev.

Baltika began its move into foreign markets in 2000 and over the past eight years has set up export shipments to 47 countries around the world, including North and South America, Africa, Scandinavia, the Asia-Pacific region, the Near East, and the countries of Europe the CIS.

The annual rate of growth of the beer market in Azerbaijan in the coming three years is 12-14% the company forecast.