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. Last Updated: 07/27/2016

Efes Looks to Quadruple Production

Efes Breweries International plans to nearly quadruple output at one of its Russian breweries and is looking to expand production to Siberia or the Russian Far East, a company official said Wednesday.

London-listed EBI, the foreign beer investment arm of Turkey's Anadolu Efes, derives 77 percent of its revenues from Russia, the world's fifth biggest beer market.

Efes Beer Group president Ahmet Boyacioglu said Russia would help EBI to increase its 2005 sales and earnings before interest, taxation, depreciation and amortization by about 20 percent over 2004 levels.

That number for 2004 was $98.3 million, when EBI's sales volume totaled about 7.6 million hectolitres.

"Russia will maintain its leading position for EBI for the next maybe two years," he said in an interview.

EBI has three breweries in Russia – in Moscow, in Ufa in the southern Urals and in Rostov in the south of the country.

"We feel quite comfortable in Russia. We find the country stable and we are ready to invest more," Boyacioglu said.

Boyacioglu said EBI planned to increase its capacity significantly mainly through its Russian operations, which are built on the Stary Melnik brand.

EBI, he said, would increase the Ufa brewery capacity to 2.0 million hectolitres this year from 1.2 million hectolitres last year by investing $20 million in brewing and canning facilities.

By the end of 2006, the Ufa plant's capacity would be doubled again with the help of a $40 million investment.

The Moscow brewery will receive $15 million in investment this year and in 2006.

Boyacioglu said that EBI was looking for a brewery either in Siberia or in the Russian Far East to cut transportation costs.

"From the logistics point of view, we need something in the east or Far East, and we are looking at either an acquisition or a greenfield project," Boyacioglu said.

Russia's large territory and poor transportation facilities push beer companies to either launch their own distribution systems -- like top Russian brewery Baltika -- or look for breweries in the eastern part of Russia, like SUN Interbrew, which has also said is looking for an acquisition in the Far East.

Apart from Russia, EBI owns one brewery in each of Kazakhstan, Moldova and Romania, and two breweries in Serbia.