Russia, Moscow: Russia's largest beer company, OAO Baltika Brewery, said Thursday, October 7, that it will not have to import malt in 2005 as cheaper supplies are available locally. Imported malt from Europe has sent production costs soaring at Russian breweries, due to the appreciation of the euro against the ruble, Dow Jones revealed.

Baltika, owned by Baltic Beverages Holding, a joint venture between Carlsberg A/S and Scottish & Newcastle PLC, was estimated to import about 50% of the malt it required for beer production.

The company said Thursday that next year it will buy 30% of its malt from a local malt company OAO Russian Solod. Another 50% will come from Baltika's own malt production facility, with the remaining 20% coming from a St. Petersburg- based maltery built jointly by France's Soufflet and Baltika.

The company said it would only use imported malt if it is able to increase production beyond its forecasts. Russian brokerage United Financial Group said the local purchases of malt " should positively impact the company's profitability."

10 October, 2004