SABMiller announces further strategic investment in India

14 June 2005

New Delhi: SABMiller plc (March 2005 turnover: $14,543 million with a pre-tax profit $2,194 million) has planned to increase its investments in India, which it has identified as a strategic growth. The global brewing company's Indian subsidiaries will invest over $125 million in capital expenditure and marketing initiatives over five years.

SABMiller had recently announced that its Indian subsidiary, MBL Investments had acquired the Shaw Wallace group's residual interest in the brewing operations of SABMiller's Indian joint-venture. The group's brewing operations comprise 10 breweries across the subcontinent making it India's second-largest brewer. Its key brands include Hayward's 5000, the leading beer brand in the rapidly growing strong beer segment; Royal Challenge Premium Lager, the second-largest mild beer in the country; Knock-Out and the international premium brand Castle Lager.

"It is widely known that India is a rapidly expanding economy and represents an exciting growth opportunity for SABMiller," says Graham Mackay, chief executive, SABMiller plc, We firmly believe that a vibrant beer business will not only contribute significantly to the economic development of the country, but a well regulated industry will encourage responsibility in the consumption of alcohol throughout the subcontinent. This can only be achieved, in our view, by working with the Indian authorities to reform the prevailing structure and reduce the complexity of the restrictions that are currently in place. "

André Parker, managing director of SABMiller Africa & Asia, added, "Climatic conditions in India are more suited to drinking beer, which is seen as a healthier alternative, than other alcoholic beverages. While the Indian beer market has been growing at 6 to 7 per cent annually, SABMiller's brewing operations in the country have recorded a much higher growth rate of 12 per cent in the last year. With the further investment we are able to upgrade and expand existing breweries, develop our brands and increase the standard of the barley farming industry through co-operative initiatives."

Mackay, during his current India visit will inaugurate the company's state-of-the-art brewery in Hyderabad upgraded at an investment of $14-million.

SABMiller stepped in to India 2000, when it bought Narang Breweries, located near Lucknow, Uttar Pradesh. In June 2001, it acquired a controlling interest in Mysore Breweries Limited. Subsequently Mysore Breweries Limited has made other acquisitions in brewing operations and in May 2003, entered into a strategic 50:50 joint venture with Shaw Wallace.