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Wednesday, July 18, 2007

UB Group uncorks expansion plans for wines

Unruffled by the removal of additional custom duty on imported wine, Vijay Mallaya- promoted UB Group is planning an investment of Rs 88 crore in the next five years for setting up two wineries and developing vineyards.

UB Group Chief Wine Maker and Business Head, Wines, Abhay Kewadkar said that the firm would set up wineries at Baramati in Maharashtra and Bangalore, besides expanding its vineyards.

"We will own 300 acres of vineyards at Baramati and simultaneously enter into long-term agreements with local farmers for 1,000 acres while discussions are on for the same in Karnataka," he said, adding that an investment of Rs 88 crore in the next five years has been earmarked for the winery and vineyard projects.

The company is expecting to sell 0.5 million bottles in the first year of Barmati winery and would gradually scale it up to 5 million bottles by the end of the fifth year, he said. Exports would also play a significant part, he added.

"We are looking at exporting 10 per cent of total production from this new winery in the first year and then increase the same to 30 per cent at the end of third year," he said.

Initially, it will be exported to New Zealand, Australia and the UK, and in the next phase it will target the US, South African and French markets.

The group's winery division - United Vinters Ltd-- also has plans to market imported wine in the country. The company has already acquired Bouvet Ladubay SAS winery in France for 15 million euros. The winery has a capacity to produce three million bottles a year.

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