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INDIA: SABMiller pumps US$500m into India consolidation

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SABMiller is looking to consolidate its Indian brewing operations in the coming years.

Speaking to just-drinks today (7 April), Ari Mervis, managing director of SABMiller Asia, confirmed that the company will spend in the region of US$500m on improving its current footprint in the country, where SABMiller is the number two player.

"We've got 11 breweries across the country, and we've taken a very detailed look at where the right footprint would be for the breweries, taking into account the legislation, the logistical costs and where market growth is coming from," Mervis said. "We've now got a grid optimisation exercise, which says that five breweries would be the ultimate footprint."

While the consolidation would not involve any brewery closures in India, Mervis said that, in some instances, some of SABMiller's breweries have had "bigger production facilities (put in) on existing land".

"We expect to spend around US$500m over the next three to four years on establishing our footprint," Mervis added. "This will also give us a platform to launch and expand our volume growth.

"In essence, an industry currently running at 12m hectolitres - with per capita consumption at one litre - if legislation moves, and consumer demand continues to grow, then it's quite conceivable that the beer market could grow to around 50m-60m hectolitres in a relatively short time period. We want to ensure that we're well-positioned to take our fair share of that growth.

"At this point, with the information we have to hand, this is an evolving platform. It's not a definitive "This is what we'll do"."

SABMiller is currently the second largest brewer in India, accounting for 35% market share, behind United Breweries.


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