Colombian drinks group Bavaria is set to invest in a new brewery in the country.

The SABMiller subsidiary confirmed yesterday (2 August) that it will spend US$175m on the facility in Yumbo, on the outskirts of Cali in the west of the country. The company said the brewery is needed to keep pace with growing demand in the region.

The new brewery, which will become operational in late 2007, will have an initial capacity of 3.5m hectolitres, increasing to 4.5m hectolitres by 2009, Bavaria said. It replaces an existing 1.3m-hectolitre facility in the centre of Cali, which is around 80-years-old and on a site which cannot be expanded.

The new plant is expected to provide employment for around 200 people, and will have two new bottling lines, a keg plant and a new can line from 2009.

"We are confident in the Colombian economy and, importantly, the support of our consumers," said Karl Lippert, Bavaria's president. "The western parts of Colombia have had to be supplied to a large extent from our Bogotá and Medellin breweries, and this move will allow us finally to catch up with the growing demand in this part of the country.

"A new brewery such as this is also a great opportunity to take steps forward in production techniques, quality, ergonomics and environmental care, to the benefit of our consumers and our other stakeholders."

Bavaria, the second largest brewer in South America, was acquired by SABMiller in July last year.