Belgian brewer Interbrew, has reached an agreement about expanding, its joint venture with the Cuban government, Cerveceria Bucanero.

The company, which dates back to 1993, is to receive an investment in the existing brewing facilities, the construction of a new brewery of 1.5m hectolitres and the development of a distribution infrastructure throughout Cuba.

"Today's agreement underlines Interbrew's intention of accelerating organic growth of its business. Since 1997 sales have grown by a CAGR of 25% per annum," Interbrew said today in a statement.

The agreement, extending the initial term of the joint venture for another 30 years, consolidates Interbrew's involvement in the Cuban beer market and "provides new opportunities to create value", the company said.

"We are very pleased to bring our state-of-the-art brewing technology and distribution and marketing know-how into our joint venture." said Hugo Powell, chief executive officer of Interbrew. "The expanded agreement with our partner will allow us to emphasise our local platform and to further create value in this promising emerging market."

Today, annual beer consumption in Cuba is about 2 million hectolitres. With a slowly but gradually improving economy and increasing tourism and foreign commercial involvement, the Cuban beer market is expected to grow significantly.

Consumption per capita is expected to grow from today's 22 litres to 50 litres per capita in 2010 with economic recovery. The Cuban beer market is split between the dollar (hard currency) and Cuban peso segments.  With a total volume of more than 600,000 hectolitres, Interbrew's joint venture, Cerveceria Bucanero, is the market leader in the hard currency segment with leading brands Cristal, Bucanero and Mayabe.