Seattle-based Pyramid Breweries yesterday announced a shift in brewery production to meet rising demand and reduce costs.

Due to increased Pyramid beer sales in 2004 and expected operating efficiencies, the company will transfer the majority of its branded beer brewing production to its Portland facilities at the recently acquired Portland Brewing Company.

Pyramid also announced it has signed a non-binding letter of intent with an international beverage company to produce malt beverages in its Seattle facility. It did not disclose who the international company was.

The company said that shifting production to the Portland brewery will enable it to increase production at that facility by 80,000 barrels of beer per year.

Pyramid also said that its Portland facilities offer more modern bottling equipment, thereby reducing overall operating costs for the company.

In Seattle, Pyramid expects to produce 24,000 - 30,000 barrels per year to fulfill the malt beverage company's orders as well as brew Pyramid beers to meet some of the local market demands.

"Today's announcements show great growth opportunities for both our Seattle and Portland breweries," said John J. Lennon, president and CEO of Pyramid Breweries, Inc. "These changes are expected to better utilize our Seattle production facility, and by shifting more beer production to Portland we will expand our brewing capacity at that facility to accommodate the increasing demand for our popular Pyramid Ales. We expect that these moves will help make meaningful reductions in the cost structure of the Company, and we see them as opportunities to strengthen Pyramid's position as one of the Northwest's leading craft-brewers, while opening the door for continued growth in the future."

The transfer of brewing production to Pyramid's Portland facilities is expected to begin in early February 2005 and be completed early in the second quarter of 2005.