Korean brewer Kabrew has secured a $5.3 million (6 billion won) worth of investment to develop their production capabilities.
The investment in newly issued Series B shares in the pioneering brewery comes from 4 institutional investors – existing shareholder Kolon Investment, Samsung Securities, Korea Investment & Securities, and Midas Dong-A Investment.
This follows an initial round of $2.5 million (3 billion won) invested in 2019.
The $5.3m will enable the Seoul based brewer to build their 4th brewery and packaging facility which will enable them to grow their annual production to 3.8 million cans.
The craft beer market in South Korea has been in buoyant mood since the government eased liquor-related regulations earlier this year.
Tax calculations were streamlined in June to be based on volume as opposed to cost of production. This made them not only easier to calculate but levelled the playing field between older and newer breweries (with newer breweries having to offset their set-up costs where older ones had already fully depreciated these investment costs).
Following a change in regulations can sales in South Korea have been on the rise
The rule changes also reduced the tax levy on canned beer and enabled smaller breweries to produce cans at larger contract facilities.
Despite, or quite possibly because of, the global pandemic the sale of craft beer through retail channels in the East Asian nation has seen an increase. The change in regulations governing canned beer has come at a fortuitous time for take-home consumers.
Many South Korean breweries have installed canning lines to benefit from the regulation changes.
One of the pioneering ‘first wave’ of craft brewers in South Korea, Kabrew celebrated their 20th Anniversary this year. They currently operate two breweries in Gapyeong, Gyeonggi-do and a brewpub in Cheongdam-dong, Seoul. Their beers are available in wholesale and retail outlets throughout the country.
The new Kabrew production facility, which is expected to be operational in late Q1 2021, will be the largest in the country and will ensure they are well placed to maximize the opportunities in a craft beer market that is expected to grow to $250 million (300 billion won) over the next 5 years.
