Russia's largest beer group, OAO Baltika Brewery , has said that it will use its own gas power station at its brewery in Rostov, in southern Russia, once it is up and running later this summer.
According to a Dow Jones report, the $7.5 million (€7m) power station has been constructed with the express intention of helping the company reduce its production costs. The project is also part of an ongoing plan to make the company more self-sufficient.
Over the past year the Baltika has launched a series of cost cutting measures, including plans to produce its own barley, malt, and even an ambitious project to start producing its own cans.
"Vertical integration is a measure typical to Russian companies and is quite rare in the West, as a measure to cut costs," said Alexander Svinov, a consumer goods analyst at Alfa Bank in an interview with Dow Jones.
"In Russia it also helps to minimise risks and control quality of supplies," he added.
In April of this year the company opened a $12 million thermonuclear power plant which it claims now provides all the heating requirements and 50 per cent of its electrical requirements for its brewery in St. Petersburg.
The company also owns a fleet of 1,000 rail cars, which are currently used to transport its beer throughout Russia and the former Soviet states.
Baltika is controlled by Baltic Beverage Holding, and owned by Carlsberg and Scottish & Newcastle. Last year the company signed an agreement to brew Carlsberg under licence in Russia.
Baltika Brewery comprising three production sites in St. Petersburg, Tula and Rostov-on-Don. In 2001 the company increased its product sales volume by 32 per cent, selling 1,400 million litres of beer.