... and last but not least Heineken to close the Ivan Taranov Brewery in Novotroitsk
Given that Russia’s economy will shrink more than 10 percent this year, dragging down beer consumption with it, Heineken’s management must have taken a long hard look at their breweries in Russia and decided that it was no longer economically feasible to run two breweries in one city (St Petersburg) and three in the Urals.
The Stepan Razin Brewery in St Petersburg was the first to go. It will be followed by the Ivan Taranov Brewery in Novotroitsk which had a production capacity of 1.3 million hl when Heineken bought it in 2005.
The Ural region is primarily known as Russia’s centre of heavy industry, steel-making and as a major transportation hub. A substantial share of Soviet petroleum was produced there, mainly in Bashkortostan. Deposits of iron ore, manganese, and aluminium ore are mined. As the second most populous region of Russia, the Urals has a large Gross Domestic Product, based primarily on urban economic activity. The GDP per capita is also just above the national average, it was reported.
In the past, that would have warranted operating three breweries, each several hundred kilometres apart. In the present economic climate – no longer.
Dimitar Alexiev, CEO of Heineken Russia explained: “Heineken Russia has been investing a lot into the Russian beer market. After the investment project in the Volga Brewery last year, and the industrial expansion of the Patra Brewery we have secured considerable production capacity for the Ural region itself and its closest geographical areas. Now the time has come to leverage on the industrial potential we have created in this part of Russia. By consolidating production onto next closest sites of the Shikhan and Patra breweries, we are able to further improve overall efficiency of our company and grow its profitability.”
The recent closures leave Heineken Russia with just one brewery in St Petersburg (acquired February 2002), the Shikhan brewery in Sterlitamak, Bashkortostan Republic (acquired August 2004), the Volga Brewery in Nizhniy Novgorod (acquired August 2004), the Heineken Brewery Siberia in Novosibirsk (acquired October 2004), the Patra in Yekaterinburg (acquired May 2005), the Heineken Brewery Baikal in Irkutsk (acquired July 2005), the AMUR-PIVO in Khabarovsk in Russia’s Far East, and the Company PIT in Kaliningrad (both acquired August 2005).
Between 2005 and 2008 Heineken has been able to defend its number three market position in the Russian beer market with its 15.8 percent market share (AC Nielsen 2008).
