Asia Pacific Breweries extends into Sri Lanka

26/09/05 Extending its presence to South Asia, Asia Pacific Breweries Ltd (APB) has acquired a 60% equity stake in United Brewery Lanka Limited (UBL). APB will inject up to USD 5 million (S$8.25 million) in fresh shareholders funds to be funded from internal resources.

Partnering Sri Lankan-based Anandappa family group and associates and MBL Offshore Limited, a wholly-owned subsidiary of Phoenix Beverages Limited which is a leading beverage group from Mauritius, the investment marks APB's maiden entry into Sri Lanka.

Sri Lanka is one of the most liberal and foreign investor friendly economies in South Asia. With a population of approximately 19.3 million, the country's GDP is expected to grow between 5% and 6% per annum. In line with its economic growth, the Sri Lanka beer market is expected to grow at a rate of 6% per annum.

UBL operates a brewery with a designed annual production capacity of 120,000 hectolitres. The brewery which is located in Mawathagama, in central Sri Lanka, produces and markets local beer brands including Bison XXtra, Kings Lager, Kings Pilsner and Kings Stout.

UBL offers potential for further upside from leveraging on its local beer brands and distribution system. By leveraging on the strength of UBL's distribution with trade channels, there will be an opportunity for APB's beer brands to cross sell into the various segments of the Sri Lanka market. APB expects that the sharing of knowledge, processes and systems, particularly in marketing, distribution and procurement, will further enhance UBL's competitive position.

Moving forward, APB will team up with the management of UBL to intensify UBL's marketing efforts and centre its activities round enhancing brand equity and strengthening its brand portfolio. Operations at the production front and distribution points will be fortified to compete more effectively, extend distribution network and increase efficiencies.