Heineken Heeds AMLO’s Call to Go South With $457 Million Brewery

(Bloomberg) -- Heineken NV, the world’s second-largest beer producer, will build a €430 million ($457 million) brewery in Mexico’s Yucatan state as the government steps up efforts to attract investment to the south of the country.

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The brewery — which is expected to open in 2026 and will manufacture brands Tecate, Dos Equis, Indio, Bohemia, Amstel Ultra, and Sol — will reuse water through “cutting-edge” treatment systems and take advantage of the region’s transport connectivity, Heineken said in a statement on Thursday. The new brewery will also “operate with minimal waste and utilize renewable energy sources through advanced processes, equipment, and technology,” the statement said.

President Andres Manuel Lopez Obrador, who is nearing the end of his six-year term, has sought to attract business to Mexico’s less-developed southern states to prevent a concentration in central and northern parts of the country. Economy Minister Raquel Buenrostro has led the push, emphasizing that, unlike the north, the southern region has good water supplies and ample availability of clean energy. But it’s a tough sell for some companies that prefer to build in the north for easy access to the US market.

Last year, AMLO, as the president is known, called on producers to stop making beer in the north of the country amid a severe drought that hit Monterrey, the country’s industrial heartland. In 2020, AMLO held a public referendum about a planned $1.5 billion Constellation Brands Inc. brewery in Mexicali which was already half finished. About 76% of those who participated rejected the new plant.

Heineken’s announcement was made in conjunction with Buenrostro and Yucatan governor Mauricio Vila Dosal. The new brewery in Kanasin, Yucatan, will be Heineken’s eighth in Mexico and will create 2,000 direct and indirect jobs. The company also has a malting plant in the country.

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The announcement also comes after Heineken minority shareholder Fomento Economico Mexicano SA de CV, or Femsa, decided to divest its stake in the global brewer.

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