Bangalore: India’s largest beer maker, United Breweries Ltd (UB), wants to dislodge SABMiller Plc from its dominant perch in the key Andhra Pradesh market with a new Rs150 crore brewery in Medak that will start production by January.

Runner-up: UB, which sells Kingfisher beer, has about 33% market share in Andhra Pradesh; SABMiller has at least 60%. Madhu Kapparath / Mint

“With this we hope to take our marketshare closer to the national average," said Shekhar Ramamurthy, deputy president, UB. The company says it has at least a 50% share of the Indian beer market as of the first quarter of this fiscal.

Vijay Mallya’s UB wants to build its share of the market in the southern state as it consumes about 18% of the annual 172 million cases of beer sold in India. Each case contains 12 bottles.

The new brewery, located in Medak district, will add to two existing facilities in Andhra Pradesh, and will be able to produce 600,000 hectolitres of beer a year when it opens. The capacity will be scaled up to 2 million hectolitres over three-five years.

In addition to increasing revenue and market share, which UB declined to quantify, the new brewery will also make up for lower production at the facility in Nacharam, a suburb of Hyderabad.

The unit can produce 400,000 hectolitres but functions at less than a third of this capacity after the state government imposed a production limit on concerns about water pollution in 2007.