E-Malt.com News article: Kazakhstan: BBH is investing EUR 35 mln at Ak Nar brewery and eyes neighbouring markets

Baltic Beverages Holding AB (BBH) the joint venture owned 50-50 by Scottish & Newcastle PLC and Carlsberg AS, is investing EUR 35 million at its brewery in Kazakhstan, BBH president Christian Ramm-Schmidt told AFX News on September 21. The purpose is to double production at its Ak Nar brewery based in Kazakhstan's financial capital Almaty. BBH owns 90% of Ak Nar, where it produces beer under the popular Derbes, Irbis and Alma Ata brands.

BBH's investment aimed to boost Ak Nar's capacity to 2.3 – 2.5 million hectolitres a year from the current 1.4 million hectolitres, according to Reuters statement. The increase of capacity will be used partly to produce Baltika brand beer, currently imported from Russia, and partly to increase production of BBH's three local brands, Derbes, Irbis and Almaty, he said.

"We have so far invested some $60 million in Ak Nar," Paul Bergqvist, Carlsberg's executive vice president and deputy chief executive officer, told a presentation late on Tuesday. "As Kazakhstan's market is very interesting, promising and fast-growing we have decided to invest a further 35 million euros ($43 million) in the plant in Almaty," he said, adding that the investment would be made by the summer of next year.

Annual per capita beer consumption in Kazakhstan, a rapidly growing oil-based economy with a population of 15 million, currently stands at a modest 24 litres. It has grown from as low 16 litres just two years ago, according to BBH, which is the largest brewer in Kazakhstan with 19.8 percent of the market.

Ak Nar currently produces below its capacity. The brewery plans to produce 60 million litres, or 600,000 hectolitres, this year and up to 100 million litres in 2006. The brewery, which exports its output to neighbouring Russia, China and Kyrgyzstan, provided no 2004 output data.

Bergqvist said BBH, working in six former Soviet states, held leading positions in the ex-communist Baltic countries with 45 percent of the local market and in Russia, where it owns the country's top brewery Baltika , with 36 percent. BBH appears unruffled by low beer consumption in Central Asia where vodka has been the favourite tipple since communist times, and Bergqvist made clear that he saw the glass half-full rather than half-empty.

"There are interesting markets other than the one where we operate today, and we are constantly monitoring the development in the countries that are not far away from you (Kazakhstan)," he told reporters. "Sooner or later we will definitely be in some of these countries", he said, citing Uzbekistan but adding that the company had no schedule.


23 September, 2005