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BANGALORE, SEPT 29: United Breweries Ltd is eyeing the burgeoning Chinese market for its Kingfisher beer brand and other products. Negotiations are on with leading companies to set up a brewery in China and investment modalities are being worked out. At present, the products manufactured in the country are being exported to China.
Sri Lanka is another market targeted by the company after that country's government recently announced major tariff cuts on beer. Initially, UB will go in for exports and set up a manufacturing facility there at a later date, UB group chairman Vijay Mallya said.
Addressing the company's 82nd annual general meeting here on Tuesday, Mallya said that UB International Ltd, a group arm, has acquired two breweries in the US. The company is marketing the Taj Mahal lager beer and Flying Horse lager there. In the UK, Kingfisher is the fastest growing product in the beer segment.
"Kingfisher, which commands a brand equity of around Rs 1,000 crore, has been well accepted in Nepal, wherethe company acquired 100 per cent stake in a brewery. In Nepal we achieved a 10 per cent market share within a few months of our launch," Mallya said.
The company has reported a net profit of Rs 7.4 crore during the first five months of the current fiscal, against Rs 5.3 crore registered during the corresponding period last fiscal. But the sales figures for the period under review are not available at present.
The company will develop its present corporate office as an international landmark with unique designs and facilities, he said. The group will discuss the matter with Karnataka chief minister JH Patel. A part of this building will be used as a hotel for which discussions are on with leading hotel management companies.
The UB group is also forming a joint venture with the Karnataka-based Ugar Sugar Company Pvt Ltd to conduct research programmes on barley. Under the proposed agreement, UB will set up barley processing plants at Hubli-Belgaum belt in Karnataka. The new entity's equity structure isyet to be finalised. It also took on lease the malting facilities of Maltex Malsters in Patiala.
"The company also consolidated its stake in UB Shepherd Neame Ltd by picking up the 50 per cent equity held by our brewing partner, Shepherd Neame Ltd," Mallya said.
The group's most significant overseas investment is in the equity of National Sorghum Breweries Ltd of South Africa. National Sorghum is one of the largest organisations in South Africa with a market share of over 70 per cent in beer business in that country. National Sorghum is at present in the process of revamping sales, marketing and distribution of products.
Regarding the UB consortium's elevated light rail transit system (ELRTS) project, he said, the company will go ahead with the venture as it is financially viable to the consortium and the state government. A detailed project report will be submitted to the state government soon.
Recently UB forged an alliance with the Chennai-based Balaji Distilleries to produce beverages. UB hasinvested around Rs 70 crore in the new facility with a capacity of 500,000 litres per annum.
The company also plans to buyback shares from shareholders when the centre announces a clear policy on this front, he added.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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