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. Last Updated: 07/27/2016

Baltika Triples Samara Brewery's Output

Itar-TassA view of Baltika's Samara plant. Upgrades at the plant will enable the brewery to meet growing demand for beer.
Baltika Breweries, the country's largest beer company, completed improvements that will enable its brewery in the city of Samara to triple output as beer consumption rises, the St. Petersburg-based firm said Friday in a statement.

The plant can now brew 6.5 million hectoliters of beer per year, Baltika said. The company spent 101 million euros ($138 million) on new equipment for the plant.

Baltika, which is majority-owned by Scottish & Newcastle and Carlsberg, is increasing production in the country as higher incomes enable more drinkers to switch to beer from vodka and seek out higher-priced brews. The country's beer market, the world's third-largest by volume, may expand by as much as 13 percent this year, Baltika said Wednesday.

The company in April doubled the planned capacity of a plant it is building in Novosibirsk.

The brewery, Baltika's 11th in the country, will be able to make 4.5 million hectoliters of beer per year when production starts in 2008.

London-based SABMiller, the country's fifth-largest brewer by market share, also is expanding in the country. The company said in June that it would build a second Russian brewery, increasing output by 50 percent and permitting a doubling of production if demand suffices.

Baltika's president, Anton Artemyev, said at a news conference Wednesday that the firm expected investment for 2003 to reach 300 million euros, Prime-Tass news agency reported.

Baltika invested 143 million euros into development from January to June, he said, the agency reported. In 2006, the brewer invested 204 million into development, Artemyev said.

Baltic Beverages Holding, whose main asset is Baltika Breweries, said in a statement Wednesday that second-quarter profit gained 26 percent.

Earnings before interest, taxes, depreciation and amortization climbed to 248 million euros, Scottish & Newcastle said. Sales gained 33 percent to 825 million euros.

The EBITDA margin, or earnings as a percentage of sales, narrowed by 1.7 percentage points to 30 percent in the quarter because of higher costs, Baltic said in the statement. (Bloomberg, MT)