Bloomberg News

Carlsberg Buys Brewery to Complement Rajasthan Plant

May 14, 2007

Carlsberg A/S (CARLA)'s South Asia Breweries joint venture has bought a brewery in Himachal Pradesh, north of the Indian capital of New Delhi, to increase its foothold in the world's second-fastest growing major economy.

Production at the brewery will be ``up and running shortly,'' the Valby, Denmark-based company said in a statement today. The brewery will be able to produce 150,000 hectoliters (3.96 million U.S. gallons) with the option for ``significant'' expansion. The beers will include several Carlsberg brands.

``The sooner we get in the better,'' said Jesper B. Madsen, head of the company's Asian operation in a telephone interview today. ``This gives us the opportunity to come in earlier, rather than to wait for the completion of the greenfield brewery in Rajasthan.'' He declined to disclose the purchase price.

In December, the Danish brewer announced plans to enter India by jointly building a brewery in Rajasthan, which will be ready in the first quarter of next year. Along with larger rival SABMiller Plc, Carlsberg is pushing into Asia to offset slowing demand in western Europe and the U.S.

Carlsberg is planning to expand in India either through acquisitions, ventures or by building new breweries, according to Madsen. It's currently targeting the northern part of India, though it will look at other areas as well, he said. The two breweries will be managed from South Asia Breweries' head office in New Delhi.

South Asia Breweries was formed in November last year, and Carlsberg holds 45 percent of the shares. The Industrialization Fund for Developing Countries holds 10 percent and the remaining 45 percent is owned by a group of investors, led by Carlsberg's partner in Sri Lanka, Lion Brewery Ceylon Ltd.

To contact the reporter on this story: Meera Bhatia in Oslo at mbhatia2@bloomberg.net

To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net.


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