Impact International / October 15, 1995
By Larry Luxner
Brazil's Companhia Cervejaria Brahma, the world's fifth-largest brewer, is undertaking a $575.8 million expansion and modernization program to meet the rising demand for beer and soft drinks in Brazil.
The expansion was announced by Washington-based International Finance Corp., an arm of the World Bank and the leading multilateral source of equity and loan finance for private-sector projects in developing countries. An IFC official said the agency is providing two loans totaling $35 million for its own account. IFC says it has also arranged a syndicated loan with 17 international commercial banks for a total of $123 million -- more than double the original target of $60 million.
Few details are available about the expansion, other than the fact that Brahma will construct two new breweries in Río de Janeiro and Santa Catarina -- allowing it to close three obsolete plants -- and upgrade seven existing plants throughout Brazil. Brahma has nearly 30 plants throughout the country.
"Growing, more open economies and rising demand in Latin America are prompting companies to modernize and expand their operations to maintain their competitiveness," said Helmut Paul, director of IFC's Latin American/Caribbean department, in a prepared statement. "IFC is actively supporting this process, as well as another important trend -- cross-border investments within the region."
In addition, IFC has approved financing to support Brahma's first foreign direct investment, a $108 million joint-venture brewery in Argentina. CCBA S.A., a majority-owned subsidiary of Brahma, will construct and operate the new factory, which is to have an initial capacity of 1.5 million hectoliters.
Brahma, acquired in 1989 by Brazil's Banco Garantia, has annual sales exceeding $2 billion. Last year, it spent $90 million to purchase a controlling interest and expand the operations of Venezuela's Cervecería Nacional, a beer company located in Barquisimeto. Details: Danilo Palmer, finance director, Brahma, São Paulo. Tel: +55 11 545-3341. Fax: +55 11 545-1856.