United Breweries (UB) has entered the remote north-east Indian market through a joint-venture with a local business group in Assam.

The joint-venture will set up the region's first major brewery, in the city of Guwahati.

According to sources, UB has entered a buyback arrangement with the Guwahati-based Rhino Agencies, which is setting up the brewery. Rhino Breweries will have an initial monthly capacity of 100,000 cases, which would be increased to 200,000 cases subsequently.

Rhino's promoters will initially invest INR250m (US$5.45m) in the project while UB will provide technical support and a buy-back agreement. The brewery is expected to become operational by July 2007.

The north-east region is a lucrative beer market, though its remoteness presents logistics problems for companies. UB already accounts for a large marketshare of the area's market which it services through its Kalyani brewery in West Bengal. Rival SABMiller supports its east and north-east operations from its brewery in Orissa.

The north-east region is also called North East Frontier Agency (NEFA), and comprises of six states and one union territory. Of the states, Assam is the largest.