Construction began in June 2003 and the company says that it expects to recoup its €32 million investment in the facility within the next six to nine years. The plant will have a production capacity of 105,000 tons, which will largely go towards serving the company's main brewing facility in that region. The company has a total of five production facilities situated throughout Russia, which account for an annual demand of 300,000 tons of malt.
"The primary objective in constructing this facility has been to try and cut back on production costs," said Baltika press spokesperson Anna Kagan. "Additionally this facility means that we are supporting Russian farmers and producers. We have earmarked €10 million to secure wheat from farmers in Tula region, who will be supplying our new malt production facility directly."
Until now the company's malt supply has come from a variety of malt suppliers from outside Russia - namely in Sweden, Germany, France, Austria and the US. Kagan said that as well as reducing costs, increasing the domestic produced malt would make supply more reliable, which would also mean that Baltika would be less susceptible to fluctuation in price.
The production facility has drawn on some of the most modern equipment currently available on the market. Largely supplied by German company Schmidt-Seeger, it includes a state-of-the art milling line that aims to provide first rate efficiencies and enhance malt quality.
In recent years Baltika has been making a concerted efforts to up its own supply for every aspect of production. The company has witnessed phenomenal growth in recent years an now supplies over 30 per cent of the domestic beer market. However, in line with rising production, it has now become far more feasible to source ingredients and materials closer to home, as economies of scale are increasingly pointing to cost savings.
The Tulsa plant is now the company's second malt production facility, complementing the joint malt facility in St. Petersburg that it started up with French group Soufflet back in 2000.
On top of that the company also signed a six year contract worth €230 million with Russian company Rostar to supply alumunium beer cans at the end of last year. The deal also aims to increase production cost efficiencies as well as providing further business for Russian suppliers. The deal covers over 50 per cent of Baltika's annual canning requirements.