E-Malt.com News article: 3428

Mexico: Top-ranked Mexican brewer Modelo, maker of the popular Corona beer, on Wednesday, October 6, said it bought land in the north of the country but does not plan to build a new brewery there or elsewhere soon. Modelo's Jose Pares, head of investor relations, told Reuters the brewery's purchase of land in Coahuila state was a long-term investment and was one of several tracts across Mexico where Modelo could set up a new brewery in the future, according to Reuters.

Pares said Modelo, half owned by U.S.-based Anheuser Busch Co., one of the largest brewers in the world, still had sufficient spare capacity not to be forced into building a new beer plant in coming years. And its planned 2007 expansion of an existing brewery in Oaxaca state would push back any new plant-building operations even further, Pares said. "Modelo constantly evaluates places where it could potentially construct a plant in Mexico. We are farsighted," Pares said. "The decision to construct a plant will have to be taken when demand reaches installed capacity."

Modelo, operating at 85 percent capacity, plans to expand its Tuxtepec brewery in Oaxaca state in 2007, which will add 9 million hectoliters per year to the brewer's installed capacity. One hectoliter equals 100 liters. "We have 51 million hectoliters now and in three years we will reach 60 million per year," Pares said.

"Last year we sold 43 million hectoliters so for the moment, with the actual capacity plus the additional in 2007, we have sufficient production capacity for the coming years," Pares said. Pares said the land purchase in Coahuila formed part of Modelo's predication studies that it carries out at potential sites to determine viability in terms of water supply and ground suitability, among other aspects.

Modelo, Pares said, owns other sites around Mexico where it has also carried out viability studies for future breweries. One local media report said Modelo had invested close to $2 million in buying land in Coahuila. The expansion at Tuxtepec will make that brewery Modelo's second largest after its Zacatecas plant in the central state of the same name. The Zacatecas brewery is the largest in Latin America.



10 October, 2004