E-Malt.com Flash 22a. May 30

South Africa: Heineken may open South African brewery

Dutch brewing force, Heineken N/V is considering whether to build a brewery in South Africa, prior to the expiry of a license there for its second brand, Amstel, now held by SABMiller. Heineken officials said recently that a decision was likely before the end of 2006, according to Reuters’ communication from June 1.

South Africa is the continent's biggest beer market, with annual consumption of more than 26 million hectolitres -- more than twice global production of the Amstel brand. "Heineken, with its partners Diageo and Namibia Breweries, will decide within the coming year how to expand further into South Africa," an official said on Wednesday.

Since late 2004, Namibia Breweries has made Heineken for Namibia and exported to South Africa. Heineken has licensed its Amstel brand in South Africa to SAB and this license expires in late 2008.

While SAB has in the past expressed an expectation that the license will continue, the Heineken official said that "currently there are no discussions with SAB on the (dis)continuation of the license."

Last year, Heineken teamed up with Diageo and Namibia Breweries in a joint venture for South Africa under the name "Brand House." Heineken and Diageo have a combined 28.9 percent stake in Namibia Breweries. ...more info

China: Carlsberg is boosting its strategic commitments in the fast growing market

Danish brewing giant, Carlsberg Breweries A/S, has set up a US$ 46.3 million (€36.7 million) investment in northwestern China's Xinjiang region...more info

Croatia: Pivovarna Lasko is expected to sell Jadranska pivovara

Croatia, Split: Slovenian Company, Pivovarna Lasko, might have decided to sell its small Split-based brewery Jadranska pivovara due to poor four-month results...more info

Czech Republic: Czech beer exports up by 15.5% in Q1 2005, domestic sales down

In the first quarter of 2005 Czech breweries exported about 560,000 hectolitres of beer, an increase by 15.5 % year-on-year...more info

USA: Anheuser-Busch expects end to US price war

Anheuser-Busch expects a price war currently hitting sales in the US market to be short-lived, The Publican communicated on June 1.

The Budweiser brewer is currently battling with rivals including SAB Miller and Molson Coors. With beer sales declining in the US, the big players resorted to fierce price cutting over recent months.

Announcing an unchanged outlook for earnings in 2005 - the company says it expects per share figures to grow in the low-single digit range - Anheuser-Busch president/chief executive Patrick Stokes said he was confident the company would successfully restore its volume momentum.

"Facing challenges is nothing new [to this company] and time after time we have emerged more profitable with a stronger foundation for future growth." Mr Stokes added the company expected "significant improvement" in domestic beer sales and profit performance in the second half of 2005 and it would "continue to target double-digit earnings per share growth over the long term".

The company, which has around half of the US beer market, believes its international business will also help drive earnings, especially in China and Mexico. Anheuser-Busch and its partners already account for 45m barrels of beer volume in China and together have a 19 per cent share of the market.

Malt News

Australia: International Matting Company Australia expands its Geelong Malting Plant

International Malting Company Australia (IMCA) announced on May 31 its intention to increase the production capacity of its Geelong, Victoria, malting plant...more info

Ukraine: Slavutskiy malting house ended 2004 with about 20% revenue increase

French Company Soufflet Group, the world's leading maltster, has recently announced that its Ukrainian subsidiary, Slavutskiy Malting Plant, has registered an annual revenue of UAH125.893 million (about EUR 20.3 million) for 2004, according to Agro Perspectiva’s communication from May 24. The source said that company’s revenue increased by 19.9% or with UAH20.9 million compared to 2003 revenue.

Slavutskiy Malting Plant has finished 2004 at UAH7.9 million profit compared to UAH8.4 million in 2003.

In 2004 Slavutskiy Malting Plant produced about 76,600 metric tonnes of malt (UAH124.8 million).

Slavutskiy Malting Plant, based in Khmelnytska region, is the largest malt manufacture of Ukraine. It is owned by French Company Soufflet Group. As earlier reported, French Soufflet Group had bought Slavutskiy malting house from Scandinavian Company BBH. Later on, EBRD acquired Slavutskiy malting house 24% shares from Soufflet Group. End 2004 EBRD allotted to Slavutskiy Malting Plant production facilities development/enhancement US$11.8 million credit. Slavutskiy malting house is calculated for 120,000t barley annual processing (in terms of malt — over 70,000t).

1 EUR= UAH 6.2709 as of June 1, 2005

Barley News

Canada: Barley exports are expected to increase by more than 30% in 2005-2006

Agriculture and Agri-Food Canada (AAFC) forecasts that for 2005-2006 total barley supply is projected to increase by 3%, due to higher carry-in stocks resulting from the large production of low-quality barley in 2004-05, according to AAFC’s report published on May 31.

Exports are expected to increase by more than 30% in 2005-2006 as the supply of malting quality barley increases.

Carry-out stocks are expected to remain high historically and the off- Board feed barley price is forecast to be similar to 2004-05.

Malting barley prices will be pressured by higher world production, with the CWB PRO for Special Select 2-row malting barley down by C$6/t from 2004-05 at C$174/t.

Russia: The country will have an operational malting capacity of 1.2 mln tonnes

On May 18 only 52 % that is 16.5 million ha of planned spring crops were seeded. Planting was delayed by a long winter and a cold spring...more info

Hops News

USA: Hop Industry Economic Viability Initiative from Washington Hop Commission

China has come on strong and is now the world's third-largest hop producer with a 20 % market share of the dominant variety. Germany leads with 32 % followed by the United States at 30 %.

The roughly 48 hop growers in the Yakima Valley -- down from 264 in the 1960s -- survive because they've diversified into tree fruit or other crops, but they say time is running out.

"If we're going to keep our hop growers in the game, we've got to achieve major reductions in the cost of production," Ann George, administrator of the Washington Hop Commission, said.

To keep growers competitive, the Hop Commission is spearheading the "Hop Industry Economic Viability Initiative," which is entering its second phase with a $1.5 million appropriation from the 2005 Legislature. The program started last year with a $400,000 investment on labor-saving and other technologies.

Growth in the state minimum wage and increases in workers' compensation and unemployment taxes have combined to add $40,000 in costs per year to the average grower, who is already losing $300 to $400 an acre, according to the Washington Hop Commission. ...more info