World: Above 2 million tonnes of new malting facilities will lead to an overcapacity in the malting industry within next 2-3 years
The malt market is to turn from today’s deficit situation into an overcapacity in the next 2-3 years, according to the conclusions made by market analysts.
Soufflet alone, the world’s largest malt producer, is planning to increase its production capacity by 230,000 tonnes with new openings in France and Romania by 2008-2009. Malteurop, another big player of the malt market, has made new construction program for 300,000 tonnes: 100,000 tonnes in Spain operational for 2008, 100,000 tonnes in Poland for 2009 and 100,000 tonnes in Ukraine for 2010.
Irish-owned Greencore Malt is increasing capacity at its Buckie plant in North-east Scotland from 40,000t to 60,000t in time for the 2008 harvest. This follows news two weeks before of a Ј12m investment by Simpsons of Berwick, U.K., to increase production at its Berwick-on-Tweed maltings by 40,000t. Scotland has lost 120,000t of malting capacity in recent years as a result of plant closures and distillers are concerned about future supplies of malt.
Heine of Peine, Germany, constructs a malthouse in the port of Hamburg, 75,000 tons; They will shut an old unit of 30,000 tons at Peine. Avangard, Moscow/Bremen, confirmed the completion of the half-finished malting tower at Koblenz, Germany, capacity 80,000 tons. Boortmalt will add a new malt tower of 100,000 tonnes in Antwerp, Belgium soon.
Cargill plan to add 100,000 tonnes in their existing pant in Herens, Belgium and just reopened an idled plant at Sheboygan, Wisconsin. It is the first case that a closed factory is brought back to life. Other projects to restart closed plants are discussed by various companies.
China has become a major exporter of malt. In October this year two Chinese maltsters won the tender in Taiwan for deliveries of 163,000 tonnes of malt from 2008 till 2010.
As well the substantial malt price increase will definitely push on brewers to use less malt per hectoliter of beer that also may lead to a malt overcapacity.
Analysts commented that new factories will lead to the following increases: EU about 800,000 tonnes, Russia 300,000 tonnes, South America 140 tonnes, possibly 230,000 tonnes, Australia 180,000 tonnes, Ukraine 100,000 tonnes and China (rough estimate) 1 Million tonnes. Ever with some small plant closings, the global production increase will be over 2 million tones.
Taking into consideration the beer consumption increase in the emerging markets and the reduction in mature markets all around the world and the point listed here above, the conclusion is: the malting industry will be into overcapacity within next 2-3 years.
14 November, 2007
