Table of Contents


One can see photos of Brewery on my Old Brewery Photos or my photos My Photos























Annexure I : Estimated Cost of Production and Profitability

Annexure II : Projected Balance Sheet

Annexure III : Projected Cash Flow statement.

Annexure IV : Working Capital Requirement

Annexure V : Financial Ratios

Annexure VI : Financial Highlights

Annexure VII : Certificate of Incorporation

Annexure VIII : Certificate for commencement of Business.

Annexure IX : Product Flow Diagram

Annexure X : Plant and Machinery/Main equipment requirement

Annexure XI : Site Plan



  1. Initial installed capacity of the brewery is to manufacture 10,000 HL of beer per

Annum with provision to be able to produce 25% more beer per month during the peak to be increased to 3,00,000 HL.

  1. Brew house will have built-in capacity to produce 3,00,000 HL beer per annum by adding one additional brewing vessel & the related equipment’s while all other sections including fermentation, maturation, utilities, etc. will have to be expanded to match the additional capacity.

  1. Brew house is being designed to use Barely malt as well as other cereal flakes/sugar for producing pure Malt Beer as well as beer with malt & adjuncts. Sugar is used for making high alcohol content beer.

  1. Brew house will be able to use either hop extract or hop pallets but not hops. In the later case, it will be necessary to install spent hops separator.

  1. The complete ;plant, either on turn-key basis or section-wise, except for certain critical equipment fittings, are to be indigenously procured from reasonable good and most competitive suppliers.

  1. The entire beer production to be bottled by using returned bottles & new bottle. It has been calculated @ Rs.4.00 per bottle.

  1. The project is to be financed by raising debt & equity in the ratio of 1:5:1 Debt to carry an interest of 15% per annum.

  1. The entire project concept is based on the basis engineering documentation prepared and provided by the Company’s experts to suit the Indian conditions and also to ensure that the beer as per the quality standards of the Germany can be produced in the plant. Experts are trained in European Countries.

  1. The brewery will be able to use Indian raw materials including Barley Malt; however, hops extract pallet sill have to be imported since it is not being produced

in India as yet.

j. Since the characteristics of the yeast are very critical & specific with regard to the

brewing process and the beer quality, it is important to receive yeast form the Mohan Meakin Limited and propagate the same in the brewery.

  1. Preliminary investigations on quality of water available in the proposed area of location, indicate that the water is of potable quality and can be used for brewing after necessary treatment; as such it is assumed that local tube wells will be installed to meet the water requirement.

  1. Discharge of effluents from the brewery is a large quantities with moderate level of BOD/COD contamination. For this purpose, company shall acquired to 500 acres of extra land. Effluent shall be as per standards laid down by the Govt.


  1. Present production/consumption of beer in India is estimated at 50 Lacs HL per annum equivalent to per consumption of 0.5 liter as compared to a per capita consumption of 196 liters in Germany, 140 liters in Netherlands, 96 liters in U.S.A & 68 in south Africa.

  1. Consumption of beer in India till early 70s was very low (365000 HL in 1971) but it increased substantially during 70s when Govt of India permitted setting up of new breweries and also liberalized the policy of liquor distribution. Again in 1980’s the growth in consumption came down because of ban imposed by the Govt./ of India on creation of additional/ new brewing capacities .Since the beginning of the decade, the growth in demand of beer has increased with the setting up of new breweries and also a very liberalized policy of the Government on distribution/sale of beer.

  1. Present rate of growth in demand/consumption of beer is estimated at 30% and the demand of beer in the country by the end of decade is expected to be 100,00,000 HL against 1999 production level of 50 lacs HL. This leaves a gap of more than 100% to be met by creating additional brewing capacity either by expanding the existing breweries of setting up of new breweries.

  1. Western and Central Region accounts for about 50% of the total consumption of beer in India followed by Southern region- 25% & Northern region- 15%, Eastern 10%.

  1. Consumption of beer in Northern region have seasonal effect with consumption during April to September being 35% more than the consumption during the rest of the period during the winter season, substantial quantities of beer from the Northern Indian breweries are moved to Western & Southern regions. During the summer season.

  1. There is usually shortage of beer in Central India and the gap between demand/supply is met by importing from other States.


a Brewery capacity should be maintained ast a minimum level of 1,00,000 HL

with adequate built-in-provision to be expandable to 3,00,000 HL by adding

the balancing, equipment.

b. Purchase of brewing equipment should be from good manufacturers with experience of making similar equipment’s. This aspect is more crucial with

regard to the brew house equipment & fermentation and Lager tanks.

c. Project cost should be kept at the minimum level even at the cost of phasing out certain un-productive assets/expenses.

d. Effect should be made to catch the 2002 season of beer in Central India. For this it is important to finalize all the principle equipment suppliers and contracting agencies before 15th June,2000

e. Initially, the entire production of beer is to be filled in bottles.

f. Malt and other raw materials shall be purchased from suppliers recommended by consultants for one year period of international quality.




Plant capacity of any unit is fixed based on the following considerations:-

· Product demand/supply position.

· Availability of raw material

· Standard equipment capacities

· Production economics.

Demand supply position of the beer has been discussed in detail in Chapter- 19.0 and there appears to be enough gap in the present demand- supply position of beer which is

expected to increase substantially over the next five years as such this does not restrict

in fixing the plant capacity. This apart, it is important to keep in mind the regional demand- supply position, especially keeping in view the seasonal fluctuations in demand of beer.

Barley Malt which is the main raw material for producing beer is available in abundance within a radius of 500 kms. From the proposed brewery location. In fact 95% of the barely malt produced in the country; is within this belt since the best malting barley is grown in this region. Raw material is available in India, Barley is grown in Haryana, Western Uttar Pradesh, Rajasthan, Punjab. Hop is grown in Jammu & Kashmir, Himachal Pradesh. Yeast is to imported . Hop pellets are also imported from Germany.

Brewing equipment’s are tailor made and are to be specifically designed/fabricated for the desired brewing capacity; as such these considerations does not come in the way of fixing plant capacity. Most of the breweries set up during mid 70’s were of capacity 50,000 HL per annum which have gradually expanded to production level of 1,00,000 HL to 3,00,000 HL/annum. The investment on new breweries have gone up substantially with the steep increase in the prices of stainless steel. This has upset the economics of small breweries like 50,000 HL. And today the minimum economical capacity is 100,000 HL. In fact at this level of production, the brewery only makes a break even and the generating reasonable returns on investment.


First phase brewing capacity is fixed at 1,00,000 HL per annum expandable to 2,00,000 HL per annum. In order to avoid major disruptions during brewery operation, the various brewing sections are being so sized as to be able to add on balancing equipment with the increase.

Brew length is fixed at 200 HL which can give 1,00,000 HL per annum by taking 2 brews/day for 6 days in a week. The maximum permissible brews is 4 which can double the production i.e. 2,00,000 HL. After achieving a capacity of 1,00,000 HL, it will be necessary to add one more mashing vessel for which provision in the building and the connecting piping is being kept right from beginning.

Fermentation & maturation capacity is being installed matching to a production level of 1,00,000 HL per annum. Additional tanks along with piping will have to be installed with the increase in production capacity. Present fermentation & maturation tanks are being installed in an insulated hall. In case of gradual increase in production capacity as mentioned in para 1 above, it may not be technically feasible to add a cold room and as such it will be necessary to assess the technical viability of installing such additional tanks as outdoor type.

Bottling line being installed is of capacity 7000 bottles per hour which is adequate to bottle 1,00,000 HL on single shift operation, however, during peak days of demand, it may be necessary; to operate the bottling line on 11/2 to 2 shifts. With the increase in production capacity, the bottling plant will have to operate 2-3 shifts daily.

Utility equipment’s including steam, refrigeration, electrical, water treatment etc. Do have some spare built in capacities but will require installation of balancing equipment’s.


Project cost estimates in this study are based on purchasing process equipment from a medium sized fabricator having good facilities for fabrication, finishing and quality control. Such fabricator are available in and around Delhi and also at Pune/Mombay. Utility equipment’s are recommended to be purchased directly from the manufacturers and the installation of the same can either be entrusted to the suppliers or can be organized from local agencies. The above system is expected to keep the overall project cost within the reasonable/economical limits.



Initially, beer is proposed to be filled in 650ml. bottles while at a later stage, part of the beer produced may also be filled in two piece aluminium / steel cans. Packing materials required include the following :-

· 650ml. glass bottles.

· Crown Corks

· Body/Neck Labels.

· Corrugated card-board boxes.


In view of the limited availability and high cost of new glass bottles, it is customary in the Indian brewing Industry to use maximum of old bottles and the balance as new bottles. The present level of consumption of old bottles is varying from 70% to 90%. In this study, the level of consumption of old bottles has been assumed as 50-80% and balance 20% of new bottles.

Based on the above parameters, the requirement of old/new glass bottles, crown corks, labels & corrugated card-board boxes is given below of this report. The gross requirement is worked out after allowing for loss due to breakage and rejects.


Well established organizations of old bottle dealers are operating on all India basis with network for collection, sorting, packing and supply of washed/unwashed empty glass bottles from small/large consumers are collected and sorted for damaged bottles. These dealers usually enter into annual contracts and keep supplying the bottles as per the scheduled requirement of breweries.

New glass bottles are available from manufacturers who are spread all over the country. In north India there are three main manufacturers, namely:-

- Hindustan National Glass Works Limited, Haryana

- Universal Glass, Sahibabad

- JG Glass Limited, Rishikesh.

- AGI, Hyderabad.

A couple of more units are manufacture of glass bottles are under planning/ implementation in North India. Normally, there is not difficulty in getting the supplies except for when there are major power cuts/break-down.

Crown Corks are being manufactured in very large quantities by Larsen & Tubro Ltd; Bombay while there are a few small scale manufacturers in North India aw well. Since bottled beer may have to stay for a longer period on the shelves, it is better to use high quality crown corks which are available from L&T local crown cork from the brewing industry. In case of emergency, crown corks from some of the local manufacturers can also be used whose quality is reasonably good.

Labels and corrugated boxes are to be produced locally as per the specifications and design requirement.

Requirement/ Annum Nos.

Bottles 650ml. 1,65,00,000

Crowns 1,65,00,000

Labels 1,65,00,000

Cartons 13,30,000

Aluminium Foil 1,63,00,000


Since November,1975, a ban existed on the creation of new capacity for breweries. Hence, in the last tow decades there was no growth in the brewery industry. However,

In 1989, the government decided to defreeze beer capacity and new licenses were issued for the manufacture of beer.

The future demand for beer in the country is expected to grow at a rate of 10% p.a. as per the Tara Economics Constancy Services. The production of beer is expected to grow at a rate of 8% p.a.

There is a sufficient demand and supply gap for beer in the country as reflected from the following data:-

Year Total demand Production

1995-96 42 34

1996-97 49 36

1997-98 57 39

1998-99 67 43

Figure in Lakh HL

Thus the demand for beer is increasing, However, this demand has not been satisfied although most of the breweries are operating at 100-150% of the installed capacity.

The liquor/beer market has been segmented as follows:-

Auction Market : In Northern India the sale of beer is regulated through district-wise contractors appointed by the State Government on the basis of biennial Auctions held, the party giving highest biennial of the revenue collections is given contract of 2 years.

Govt. Shops : Mostly in the Union Territories, the shops are run by the Govt. owned corporation and the selling price, margins etc. are fixed by the govt. Delhi is an example the such market.

CSD/Para Military Forces:- The product and the prices are approved through tender to these institutions.

The company plans to sell its beer in M.P. and neighbouring states of Northern India. It proposes to sell the beer under a brand name which will be owned by it,. Although,

The beer industry is very sensitive to brand loyalties, the company does not intend to tie up with any established brand, international or domestic, for reasons of economy. Instead the company, proposes to promote its own brands names and promote sales the company also proposes to appoint sole selling distributors for institutional sales in all major cities. For sale to the Govt. shops and CSD/Para Military Forces the company intend to enter into these segments directly through tenders.

Since, the promoters are already; into manufacturing and selling of IMFL and country liquor and their brand name is already established in the market in northern India. The

Company does not foresee any difficulty to create a demand for their product in the market.


  1. The capacity utilization during the first three years will be 60%, 75% and 90% respectively.
  2. The production mix has been assumed 40% for strong beer and 60% for lager


3. The quantity has been taken as 650ml. Per bottle of strong beer and lager beer.

  1. The selling price has been assumed at Rs.174/- per dozen bottle of strong beer and Rs.144/- for lager beer not of Sales Tax.
  2. The cost of packing material has been calculated @ Rs.4.00 per bottle of beer.
  3. Power rate has been assumed at Rs.2/- per unit.
  4. Repairs and Maintenance has been taken at 1.5%, 2% and 2.5% of the gross block respectively for the first, second and third year.
  5. The administrative expenses have been calculated with a rise of 10% every year.
  6. The selling exps. Have been taken @ 10% of the sales
  7. The interest on terms loan and working capital has been calculated at the rate of 18% per annum.
  8. Depreciation for Income Tax has been made at the rate of 35% as per IT Act.
  9. Provisions for Income Tax has been made at the rate of 35% as per IT Act.



1. Promoters are already manufacturing and marketing alcoholic products like IMFL and country liquor under establish brand name.

2. There is a wide gap between the demand and supply of beer.

3. Promoter’s investment is up to 75% of the total project cost indicating financial soundness of the promoters.


1. Being a seasonal industry, the demand is only during the summer season in India.

2. Since the demand of beer is recognized mainly by a brand name, absence of tie up with any renowned brand name will affect the sale of the product.


  1. Any tie up or collaboration with an international brand name will boost the demand of the product.

  1. Growing market potential for the product as demand is expected to grow at 10%


1. Any adverse change in the govt. policies will affect production and profitability

of the company.

2. Competition from the major and established manufacturers.