- The Washington Times - Tuesday, August 10, 2004

Coors Brewing Co. plans to open a brewery at its packaging facility in Elkton, Va., the nation’s third-largest beer company announced yesterday.

The Shenandoah Valley plant, set to open in 2007, would be able to brew 6 million to 7 million barrels, or about 217 million gallons of beer, a year.

“What it does is it moves brewing capacity closer to our growth market on the East Coast,” spokeswoman Kabira Hatland said. The East Coast accounts for more than one-third of Coors’ sales.

The facility, which will cost as much as $190 million to build, will be the first outside of Colorado to brew Coors Light, the biggest-selling U.S. light beer. The plant also will make Keystone Light and Aspen Edge beers.

The Virginia plant would allow the Golden, Colo., beer giant to move the brewing closer to a growing market and eliminate the shipping distance between the brewery and packaging. Coors’ brewery in Golden ships 5 million barrels a year to Virginia to be packaged. Coors’ Memphis, Tenn., plant packages its own brew.

The company said it will save about $25 million a year in reduced freight costs and improved efficiency. Adding the brewery is part of Coors’ strategy to trim costs by $5 a barrel in the next four to five years.

“Coors has just demonstrated this huge commitment to this Virginia facility since they could’ve located it anywhere in the world, so we are excited about possible future growth,” said Jill Vaughan, communications manager for the Virginia Economic Development Partnership, a state marketing organization that recruits businesses to the state.

The new brewery will not increase the amount of beer Coors produces, which is about 23 million barrels a year. Instead, it will siphon business away from the other two plants, especially the Golden facility.

The new plant will add a maximum of 10 jobs to the current 467 at the facility.

The expansion will include two brew lines, fermentation and aging equipment, a new rail spur and several new structures to house controls and related processes.

Gov. Mark Warner approved a $500,000 grant to be paid in installments six years after Coors builds the plant. The company also will receive $450,000 for building and maintaining the railroad it will use to ship the beer, and Coors employees will receive training through the Virginia Department of Business Assistance.

Neither officials at the company nor officials in Rockingham County, where the packaging plant is located, expect opposition to the plan.

Coors’ move into the area 17 years ago initially caused concern, county Administrator Joseph S. Paxton said, but “the contributions that Coors has made back to our community has led back to a general acceptance of them in the Shenandoah Valley.”

Coors Brewing, founded in 1873, is a unit of Adolph Coors Co. The move comes as Coors Brewing is pursuing a merger with Montreal’s Molson Inc. to create the fifth-largest brewery in the world by brewing volume.

Shares of Adolph Coors Co. fell 17 cents to $65.74 in New York Stock Exchange composite trading yesterday. They have risen 17 percent this year.

• This article is based in part on wire service reports.

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