Western Europe
Case study: Accelerate efficiencies
A new brewery in Seville
Spain is a key market for Heineken. The beer market enjoys long-term growth in terms of volumes and profitability, driven by an increasing population, a strong on-trade and a healthy growth of premium beers.
Heineken España, one of the most prominent players in the Spanish market, currently operates five breweries located in Arano, Jaen, Madrid, Seville and Valencia, brewing 11.4 million hectolitres consolidated beer volume across 20 brands.
Capacity utilisation is high, running as high as 100 per cent in the peak of the summer season over the last few years. Capacity constraints increased at the brewery in Seville, which was located in the middle of a residential area, where expansion possibilities were lacking and vehicle access was limited. In 2005 Heineken España compared the cost of investing in a new brewery with the cost of expanding the existing brewery and on the basis of that decided to construct a greenfield brewery, just outside of the city. Construction started in early 2006 and the new brewery has been fully operational since January 2008.
This new brewery in Seville is particularly important to Heineken: it is the first greenfield in the Western European beer industry landscape in the past 25 years and one of the largest breweries in the Group in terms of volume. It marks our strong commitment to the growing Spanish market as well as our continuous drive for cost efficiency gains and technical improvements.
The brewery has a capacity of 4.5 million hectolitres and a technical capacity of 5.2 million hectolitres. It boasts an efficiency ratio which is twice that of the old brewery. Total investment (including the site itself) amounted to €220 million. Thanks to state-of-the-art technology and higher production volumes, the new brewery will generate annual savings before taxes of €25 million as of 2008.
In August 2006, Heineken España sold the land and buildings of the old brewery, realising a book gain of €320 million before tax. The old site will be closed.