The relocation of the Constellation Brands plant in Mexico is now official. The company that distributes Grupo Modelo’s brands in the United States announced that this factory will be located in Veracruz, in the southeast of the country.
For this plant, the company estimates an investment of between 5,000 and 5.5 billion dollars, resources that will be exercised between fiscal year 2023 and 2026, and the majority of the expense is expected to occur in the first three years of that period, from according to the data in your financial report.
Constellation Brands detailed that the new plant will add between 25 and 30 million additional hectoliters of total capacity and also considers the continued expansion and optimization at the company’s other plants in Nava and Obregón.
In its report, the firm specified that this capital investment is included in the previously disclosed capital expenditure guide, which considers the previously disclosed capital expenditure guide of $ 700 million to $ 900 million annually for fiscal year 2023 per year. fiscal 2025.
In May of last year, President Andrés Manuel López Obrador announced that he had reached an agreement for the US brewer to build a plant in the southeast of the country, following the cancellation of the Mexicali project.
The rejection of the project came after 76% of the 5% of the Mexicali electoral roll, which was the percentage of the population that participated in the consultation, voted no to the construction of the plant, which has been criticized for the use it would make of the water in the area.
The company continues to work with government officials in Mexico to determine the next steps for the suspension of the Mexicali Brewery construction project and will seek various forms of capitalized cost recovery and additional expenses incurred in the establishment of the brewery. “For the first quarter of fiscal year 2022 we registered a deterioration of 666 million dollars in the Mexicali facility (…) However, there can be no guarantee of recovery,” says the report.