Shaw Wallace Scripts Rs 100 Crore Spread Plan For Breweries

Shaw Wallace (SWC), promoted by Manu Chhabria, has lined up a Rs 100 crore expansion of its breweries division. The expansion entails setting up of breweries in Kerala, Madhya Pradesh, West Bengal and Karnataka.

According to sources, the expansion is in line with Chhabria's strategy to have at least one brewery in each state in the country. At present, Shaw Wallace has breweries in Andhra Pradesh, Maharashtra, Orissa, Pondicherry, Haryana, Karnataka, Goa, Uttar Pradesh, Himachal Pradesh and Rajasthan. In addition, the company has a brewery in Nepal.

Among the new breweries being set up, the first off the block will be Malabar Brewery in Kerala.

Located in the Thrissur district, this brewery is expected to start production by the end of the current fiscal. Initially, the brewery will produce one lakh cases (of 12 bottles each) per month, which will subsequently be increased to two lakh cases. Being put up at a cost of Rs 20 crore, it is being funded equally out of debt and the promoter's contribution plus internal accruals.

It is worth noting that the Kerala market is currently being serviced by Shaw Wallace out of its SICA Breweries in Pondicherry. The company is able to send only 25,000 cases per month from this brewery to Kerala where there is a demand of some three million cases per annum. By the end of the current financial year, Shaw Wallace hopes to improve its volumes in the state as the new brewery starts production.

The company also expects its best-selling Royal Challenge Premium lager beer to become available at a discount of Rs 5-8 per bottle over the current price once Malabar Brewery goes on stream.

Sources also said Kerala is essentially a mild beer market and Royal Challenge with an alcoholic content of 4.2-4.5 per cent meets the expectations of the consumers in the state. Civil work on the brewery has begun.

Work will also start on another brewery at Jabalpur, in Madhya Pradesh, later this month. In addition, Dubai-based Chhabria had recently told Business Standard that during this month, the company would come out with new labels, bottles and cartons - a total repackaging across the board. Shaw Wallace is the largest player in the fast-growing strong beer segment with brands such as Haywards 2000 and Haywards 5000. It also sells Lal Toofan beer in the UK and has drawn up plans to launch its Kohinoor brand in the US.