Jan. 07--Constellation Brands, which produces Corona and Modelo beer, said Thursday it would build a new $1.5 billion brewery in Mexico to capitalize on the rapid growth in demand for Mexican beers in the U.S.
The new brewery will be in Mexicali, Mexico, a key location for its proximity to California, Constellation's largest beer market in the U.S.
The company said it would spend about $250 million to expand its brewery in Nava, Mexico, again. Constellation previously announced a doubling of production there, set to be completed in June.
"We remain on track with all expansion activities," Rob Sands, Constellation's CEO, said during an earnings call Thursday. "I'm excited to be in a position to continue investing in Mexico and enhancing our operational platform to support the industry-leading growth levels of our incredible beer business."
To ensure it can produce all the beer it needs for the U.S. market during the construction and expansion, Constellation said it will extend a supply agreement with Anheuser-Busch InBev through June 2017. Until then, ABI is expected to produce about 15 to 20 percent of Constellation's beer for U.S. consumers.
The Victor, N.Y.-based company also said Thursday its third-quarter sales rose 6 percent. Its stock is up about 2 percent before the opening bell. Constellation Brands' beer division is headquartered in Chicago.
sbomkamp@tribpub.com
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