The Hindu Business Line : Mount Shivalik, Cobra may ink manufacturing pact

THE Karan Billimoria-owned Cobra Beer is likely to ink a contract-manufacturing tie-up with the Mount Shivalik Group, which operates breweries in Rajasthan and Punjab.

As part of the impending agreement, Mount Shivalik may produce Cobra beer in its Rajasthan plant initially and would look at extending the arrangement to the other plant in Punjab as well.

Speaking to Business Line, Mr Monish Bali, Director of Mount Shivalik, said both companies were seriously pursuing the arrangement. He did not divulge how much capacity would be set aside for Cobra Beer.

Mount Shivalik's Rajasthan plant has a capacity of 2.5 lakh hectolitres, which translates into roughly 2.5 million cases annually.

Earlier, Mr Perses Billimoria, Regional Director of Cobra Beer, told this newspaper that the company was poised to announce manufacturing tie-ups with a few independent brewers in the country.

Cobra Beer has been scouting for manufacturing tie-ups with two breweries each in the north and in west of the country. The alliance with Mount Shivalik would enable easy access for Cobra into the Delhi market and drop the retail price substantially. Currently, the imported Cobra beer sells at Rs 99 per 330 ml pack in Delhi. The UK-based Cobra Beer has annual earnings pegged at over 600 million pound sterling.

Meanwhile, Mount Shivalik Group is expected to end the financial year 2003-04 with sales of around 6.5 million cases. The group's beer brands include the flagship Thunderbolt Super Strong and two regional brands - Golden Peacock and Punjab. It also produces and markets American beer Stroh's in the northern and western parts of the country. "We sold about 5.5 million cases last year and expect to sell one million cases (20 to 22 per cent) more this year," Mr Bali said. Mount Shivalik has received a letter of intent from the Bihar Government to issue licence for a Greenfield brewery in the State.

Mount Shivalik, as part of its national expansion strategy, has also partnered with local brewers in Maharashtra and Madhya Pradesh. It is currently drawing beer from Hindustan Breweries in Thane and from MP Beer Products in the neighbouring Madhya Pradesh. Incidentally, Cobra Beer has also been in discussion with Hindustan for a manufacturing footprint in western India.