AB InBev Unit Grupo Modelo to Build Brewery in Central Mexico
November 27 2017 - 5:17PM
Dow Jones News
By Anthony Harrup and Robbie Whelan
MEXICO CITY -- Grupo Modelo, the Mexican unit of Anheuser-Busch
InBev and brewer of Corona Extra and other export brands, plans to
invest 14 billion Mexican pesos ($753 million) in the construction
of a major brewery in central Mexico.
The brewery in the state of Hidalgo is expected to start
operating in March of 2019 with annual capacity to produce about
320 million gallons of beer a year, or about 9 million bottles of
beer a day, Grupo Modelo Chief Executive Mauricio Leyva said
Monday.
The brewery, Modelo's eighth in the country, will employ 1,200
people and is designed to be able to double capacity in the
future.
The location has a number of advantages, including availability
of water, barley and energy, and proximity to major roads and
railways. Hidalgo is Mexico's second-biggest producer of malt
barley used to make beer, and is also one of Mexico's safest
states.
José Luis Romo, secretary of economic development for Hidalgo
state, said the project will bring investment in the state this
year to $1.6 billion, compared with an annual average of just $170
million a year over the past six years.
The brewery is a key development for the state, which saw its
economic output decline for three consecutive quarters, including a
double-digit drop in industrial activity in the second quarter of
this year. The brewery is the largest single private investment in
the state's history, government officials said.
"Historically, Hidalgo has been one of the five states most
lagging in economic growth in the country," Mr. Romo said. "What
we're doing with these investments...is to completely turn around
the scenario we had."
Hidalgo has depended heavily on public investment, and was
affected by government budget cuts in recent years, Mr. Romo
added.
"We're convinced that one of the best ways to help develop
industry in the country is to invest in areas that historically
have not had a lot of investment," said Mr. Leyva, who is also AB
Inbev's zone president for the Middle Americas.
Hidalgo competed with the nearby states of Mexico, Tlaxcala and
Querétaro for the new Modelo plant, and is one of three states that
submitted proposals last month to try to attract Amazon.com's
second global headquarters.
Omar Fayad Meneses, governor of the state, said recent
improvements to highways, railroads and other infrastructure had
made Hidalgo more salable for corporate expansions.
"A lot of things have come together at the same time that have
been very positive for Hidalgo to attract investment," Mr. Fayad
said.
Mexican President Enrique Peña Nieto thanked Modelo during the
announcement at the presidential residence of Los Pinos here, and
said that beer is one of Mexico's most important agroindustrial
products. The country is the fourth-largest beer producer in the
world after China, the U.S. and Brazil, with production of around
11 billion liters a year.
Investments like the new Hidalgo plant "help the whole country
grow," Mr. Peña Nieto said.
Write to Anthony Harrup at anthony.harrup@wsj.com and Robbie
Whelan at robbie.whelan@wsj.com
(END) Dow Jones Newswires
November 27, 2017 17:02 ET (22:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Anheuser Busch Inbev SA NV (NYSE:BUD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Anheuser Busch Inbev SA NV (NYSE:BUD)
Historical Stock Chart
From Sep 2023 to Sep 2024