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Chile's CCU, Valdivia to invest in new brewery projects
Impact International / January 15, 1998

By Larry Luxner

SANTIAGO -- Chile's Compañía Cervecerías Unidas S.A. (CCU) will spend $525 million to expand its presence throughout South America between now and the year 2000.

The company says this includes building a brewery in Buenos Aires, with an annual capacity of 1.5 million hectoliters, and expanding CCU's existing plant in Argentina's Santa Fe province. In addition, CCU will spend $180 million to build a new plant in Temuco, in southern Chile, and to improve its sales and distribution systems.

Argentina is CCU's current priority, since the company registered 50% growth there in 1996; it hopes to boost its share of the Argentine beer market from 11% to 20% (Quilmes has most of the rest). In 1996, CCU sold 4.5 million hectoliters of beer -- 3.5 million in Chile, and 1.0 million in Argentina. CCU says it wants to consolidate its presence in those two markets before conquering new export markets like Bolivia, Peru, Paraguay and Uruguay.

Separately, Chile's Cervecería Valdivia has built a new brewery capable of produc-ing 1 million liters of Kunstmann beer in 1998, quadrupling the company's current output.

The Santiago newspaper El Mercurio says the $2.3 million plant -- patterned on the microbrewery boom spreading across the USA, Canada and Germany -- will distribute Kunstmann beer throughout southern Chile as well as Santiago and Viña del Mar. This sytem uses small breweries to supply specific areas, thus working in coordination with other small breweries. To maintain the beer's quality, its production is based on the Reinhietsgebot -- a quality-control standard established by Duke William IV of Bavaria in 1516. This indicates that the beer is produced using only malt, yeast, hops and pure water.

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