ST. PETERSBURG -- Russians may not like their beer in cans, but that doesn't stop local brewers from wanting to produce it that way.
St. Petersburg-based Baltika Beverages Holding plans to expand its export program by launching a high-tech $1 million canning line to be supplied by local company Rostar, which will be capable of turning out 30,000 aluminum cans of beer per hour.
By 2001 the holding, the nation's largest brewer, plans to raise its export levels to 10 percent of annual production.
Exports account for no more than 1.5 percent of current production, but should hit 2 percent by the end of the year, said Baltika president Taimuraz Bolloyev.
This year Baltika set up a special department for handling export orders. The holding, a joint venture split 50:50 between Finnish company Hartwell and Swedish-Norwegian firm Pripps Ringnes, already supplies beer to Britain, Germany, Israel, Greece and Mongolia and now plans to export to China.
Pavel Ulyanov, president of the Rostar Holding company, said negotiations on the beer-canning line have lasted more than two years.
"Baltika tried to launch beer in cans last year, but the local market didn't take to it," said Oleg Dembo, director of market research company O+K, who suggests canned beer has no future in Russia since the majority of consumers consider it inferior to bottled beer.
If canned Baltika is released locally in bulk, it could have a negative effect on the brand's image. "Consumers will think the beer is low quality f an impression that may be extended to other types of Baltika," Dembo said.
Local brewers have not turned their attention to cans by chance.
For Baltika, this is linked specifically to export projects since cans are far easier to transport, Bolloyev said Tuesday at a news conference.
He added that China represents the most promising foreign market outside Russia, as "there is virtually no Russian beer there. An insignificant amount of Baltika gets as far as China, but the beer goes through intermediaries who up the price."
By 2001 Baltika exports should reach 10 million barrels per year.
According to initial forecasts, the three Baltika factories in St. Petersburg, Rostov and Tula should produce 117 million barrels. Output for 1999 was 65.5 million barrels.
Baltika isn't the only one looking east.
The major Moscow-based Ochakovo brewery plans to start exporting its beer and nonalcoholic drinks to China this fall, said Inna Kochetova, the factory's vice president, who does not rule out building a factory there if Ochakovo establishes a market.
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