Bilimoria’s Cobra Beer looks at more acquisitions

March 24th, 2008 - 3:43 pm ICT by admin  

By Vishnu Makhijani
New Delhi, March 24 (IANS) Lord Karan Bilimoria’s Cobra Beer is mulling at least two more acquisitions of breweries in India as part of plans to invest some $50 million in the country towards expansion and grab a 10 percent market share. “Two more breweries - one in Andhra Pradesh and another in Bangalore - are coming on line soon. These could either be franchise arrangements with existing breweries or acquisitions,” Bilimoria said.

“Our aim is to grow the Cobra beer brand to 20 million cases annually from some 2.5 million cases now to grab a 10 percent market share. We are also looking at a greenfield project,” London-based Bilimoria told IANS.

A member of the British House of Lords and a co-chairperson of the Indo-British Partnership Network, the Hyderabad-born first generation entrepreneur said his Cobra beer had a present market share of two percent in India.

“I know 20 million cases and a 10 percent market share are big targets. But we are confident of achieving that. The Indian beer market is the fastest growing in the world with 27 percent growth and we hope to cash in on that,” he said.

“We see double digit growth over the next two decades. Even if the beer industry grows at the rate of India’s GDP (gross domestic product) it is big. So we do see 10 percent share of the market.”

Toward this end, Bilimoria’s London-based Cobra Beer Ltd. plans to acquire two breweries and establish two greenfield plants to add to its seven plants across the country. Of these two have been acquired while others are on licences.

Between them they will have a capacity of 400,000 cases a month by May.

“In November 2006, we were producing 25,000 cases a month. By May 2007, we were at 250,000 cases a month. That was a seven-fold growth in 10 months. Now, we are looking at 400,000 cases a month by May of this year.

“It’s not just the volumes it is also quality across breweries. I’m getting that right. I can say I have a product that stands out from the rest,” said the trained chartered accountant, nominated to Britain’s House of Lords in 2006.

Currently, the company only markets its Cobra brand in India - in both mild and stronger versions. Based on its success in England, it now plans to introduce its premium King Cobra label.

Bilimoria said his group was also looking at the growing wine market in India, as the group produces 10 varieties of reds, whites and rose in Spain, France and South Africa. He hoped for a rational duty structure for wines and beer.

“Even in Britain, which is one of the most expensive places, wines can sell for as low as three pounds (less than Rs.250). I see no reason why it shouldn’t sell for the same or even lower price in India,” Bilimoria said.

“A growing wine industry will prove good for Indian agriculture and farmers.”

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