WINNIPEG – The world’s largest malting company is considering building a plant in China, the world’s fastest growing market for beer.
Canada Malting is doing a feasibility study into the plant. Andrew Raphael, a vice-president in charge of business development for the company, said the study should be completed by October.
Raphael said the plant could eventually produce as much as 150,000 tonnes of malt per year, requiring 190,000 tonnes of barley. This is about half the size of its Calgary plant, and comparable to its other plants in Canada, the U.S. and the United Kingdom.
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The plant could have spin-off benefits for Canadian barley producers. Raphael said the company would prefer to work with Canadian barley, and would “give Canada the first crack if the price was right.”
China produces about 123 million hectalitres of beer per year. Raphael said the market has grown by about 23 million hectalitres a year for the past couple of years – the size of the entire Canadian beer market.
It is the second largest market for beer, just behind the United States and ahead of Germany.
“We sell to all the leading brewers in the world and therefore our strategy is to follow them when they go into these markets,” Raphael said.
While China imposes a 35-percent import duty on malt, the duty for barley is only three percent.
Raphael said Canada Malting has been working on the idea for a couple of years. “It’s a very complex market, so we’ve been very prudent, yet we have a vision that China is where we should be,” he said, adding that the company would likely pre-sell the malt before it builds the plant.
If the company goes ahead, Raphael said it would take about 15 months to build the plant. He wouldn’t comment on the cost, but said: “It’s very expensive to build in China because you have to build the infrastructure,” including distribution, handling and storage facilities.
