11th Baltika Plant Aims to Crack Open Siberia Market

Carlsberg's Baltika Breweries, the country's biggest beer company, opened a plant in Novosibirsk to gain market share in a region with "huge" potential, president Anton Artemyev said Monday.

Baltika's 11th factory in Russia cost 134 million euros ($211 million) and can make 4.5 million hectoliters of beer per year, equal to around 10 percent of the company's sales last year, Artemyev said in Novosibirsk, the country's third-largest city.

"Beer consumption in Siberia is lower than in Russia overall," Artemyev said. "Baltika's market share here is also lower than in the rest of the country." The company will make a new beer, Siberian Keg, at the plant to cater to local tastes.

The country's beer market will grow "for many years to come," Carlsberg CEO Jrgen Buhl Rasmussen said after the opening, citing rising incomes and a trend toward drinking less vodka and more expensive beers. "That's why it's so exciting to be in this market," Rasmussen said. "In Western Europe, you don't find this kind of market any more."

Russian annual beer consumption may reach 120 liters to 140 liters per person, the same as in Western European markets "with high consumption," Rasmussen said, without giving a time frame. That is up from 78 liters last year, Artemyev said. Business Analytica expects Russian beer sales to climb 5.9 percent this year.

The Novosibirsk plant is Baltika's first east of the Ural Mountains that can make licensed beers, such as Carlsberg's Tuborg. The new local brand, Siberian Keg, "will be in the lower mainstream segment," Artemyev said. The brewer's competitors in Siberia include SABMiller, with its local brand Zolotaya Bochka.

Artemyev said Baltika also was increasing sales in former Soviet states, where beer markets are expanding more quickly than in Russia.