Carlsberg, the Danish brewer with presence in over 130 countries in the world, is entering the Indian beer market by setting up a 450,000 hectolitre (hl) capacity brewery in Rajastan.

For this, the multinational beer major is joining hands with its Sri Lankan partner, The Lion Brewery Ceylon, to float a joint venture company – South Asian Breweries Ltd – in the country.

Carlsberg will own a 45 percent stake in the Indian venture and an investor group led by Lion Brewery Ceylon will hold another 45 percent, while the remaining 10 percent equity will be held by Industrialisation Fund for Developing Countries. The expected total investment in the venture was not disclosed.

The site for the new brewery is in the industrial estate established by Rajasthan State Industrial Development and Investment Corporation in Alwar district. South Asian Breweries will be based in New Delhi. The brewery will be operational in the first quarter of 2008, the company said.

Carlsberg's entry into the domestic market signifies the potential for growth in the beer market. Several other international brewers are also keen to enter the growing market.

The domestic annual beer consumption per capita is among the lowest in Asia, at only about 0.7 litre per year and the annual GDP growth rate is more than 9 percent, say industry analysts.

The total beer market in India is approximately 8 million hl at present. However, it is currently among the top 3 markets in Asia in terms of expected growth rates.

The total beer consumption in 2005 in Rajasthan and the three neighbouring states of Delhi, Haryana and Uttar Pradesh was 1.7 million hl with a population base of 250 million.