Heineken-owned United Breweries has entered a leasing agreement with Ilios Breweries for a facility in the Indian state of Andhra Pradesh.
In a stock exchange filing, United Breweries said the extra capacity will help it “meet rising consumer demand and ensure continued availability of Kingfisher beer”.
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The move is expected to “further enhance” United Breweries’ “regional footprint and build supply chain agility”.
United Breweries currently owns one brewery in Andhra Pradesh in Ranasthalam, Srikakulam district.
The Bengaluru-headquartered business said this additional capacity will also “support long-term growth and improve distribution efficiency across Andhra Pradesh”.
United Breweries CFO Jorn Kersten said: “We are excited to expand our presence in Andhra Pradesh and are working hard to provide our consumers with more and better access to their favourite beer. Our production expansion in Andhra reflects our commitment to those who love Kingfisher and our portfolio of beers.
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By GlobalData“This new facility marks a significant step in realising our long-term growth ambitions in the state.”
In addition to Kingfisher, United Breweries manufactures brands including Amstel, Heineken Silver, Bullet, and London Pilsner.
It owns 20 other manufacturing sites across India.
For its fiscal year ended 31 March, United Breweries reported standalone net sales of Rs89.07bn ($1.04bn), an increase of 10% compared with the year prior.
Earnings before interest and tax rose 15% year-on-year to Rs6.42bn. Profit after tax reached Rs 4.41bn, registering an 8% growth.
In January this year, United Breweries resumed its beer supply to Telangana, a neighbouring state of Andhra Pradesh, following a brief pause.
Supply had been halted due to Heineken’s price increase requests to the state-owned Telangana Beverages Corporation Limited (TGBCL) having not been approved.
United Breweries had been negotiating with the government for two years to increase product base prices without success.
“Escalating losses made our operations in the state unviable,” the company said at the time, adding that “substantial overdue payments for the supplies made to TGBCL further complicate the situation.”
