E-Malt.com News article: 3178

Russia: Holland corporation Heineken intends to become one of leaders at Russia’s beer market. For this purpose Heineken needs production capacities in regions. Currently, share of the company at Russia’s beer market amounts to 7,3%, Russian Brewers Association has recently posted.

In his interview to journalists Roland Pirme, General Director of business unit of the concern in Russia «Heineken Brewery» said in 2004–2007, the company would invest Euro 100 mln. in development of two breweries (“Shikhan” and “Volga”) acquired from Central European Brewery Company (CEBC) for the purpose to strengthen its positions in Russia. However, experts consider that planned increase of production capacities of these enterprises will not allow Hollands to reach their objectives. In this case there are few options for development of Heineken business in Russia: the company may either build one more brewery in one of promising regions of the Russian Federation or purchase there already operating enterprise. From this point of view, Patra (Ekaterinburg), control stake of which was acquired by investment company «Alfa-Eco» in July of 2004, is quite attractive for breweries.

Brewery international company “Heineken” ranks third in the world after SABMiller and Anheuser-Busch. Based on its performance for 2003, net profit of the company amounted to Euro 798 mln. (Euro 795 mln. 2002). Sales volume in the last year increased by 8,8% and amounted to Euro 9,23 bn., if compared to 2002. Heineken brands are sold in over 170 countries. The company also owns over 115 breweries in over 65 countries of the world. In February 2002, Heineken acquired in Russia Bravo International Brewery in St. Petersburg. (Since March 1, 2003, the company was re-named to LLC «Heineken Brewery».) At the present time, Heineken branch in Russia has been producing such brands as Heineken, Buckler, Lîwenbrau (under licence), and national «Bochkarev», «Okhota» and some others.

According to Roland Pirme, General Director of LLC “Heineken Brewery”, International Corporation Heineken N.V. plans to invest about Euro 100 mln. in its Russia’s breweries within 3 years.

Investment funds will be used for expansion of production capacities of two breweries having recently acquired by Heineken - "Shikhan" (Sterlitamakh) and "Volga" (Nizhny Novgorod). "Capacities of our company in St. Petersburg have already been increased to the limit and therefore we will make no investments in it any longer", - Roland Pirme added.

According to his information, within the nearest three years, production capacities of "Shikhan" and "Volga" will be 2 times increased. Consequently, aggregate capacity of three Russia’s breweries owned by Heineken will reach 9,5 mln. hectolitre (hcl) per annum, and the company’s share at the brewery market of the Russian Federation will exceed 9%.

Roland Pirme added that Heineken does not exclude its future purchase and construction of a new brewery in the Russian Federation.


06 September, 2004