Sharpe to pour $10M into Northern Breweries plant.

One of Canada's best-known brewers is the new owner and president of Northern Breweries Ltd.

After weeks of speculation, Bill Sharpe, the former founder of Hamilton's Lakeport Brewing Company, was officially introduced at a Dec. 1 news conference in Sudbury.

He promised a major financial and physical revitalization of the struggling 100-year-old regional brewer, as well as scores of new jobs.

Sharpe and a group of silent partners committed to the creation of 120 full-time jobs over the next four years for Northern's two brewing plants in Sudbury and Sault Ste. Marie, a capital investment of between $8 and $11 million, an estimated $80 million in economic spinoffs for contractors and expanded North American markets with some new beverage brands.

"We're not here to try and start a small company and hope it will survive; we're going to spend and invest into company and it will flourish," said Sharpe, who also works as an industry consultant and is founder of the Skeena Brewing Company, a new Stoney Creek, Ont. microbrewer of German-style beer.

Northern Breweries presently employs 60 full- and mostly part-time employees, including many on a reduced production schedule in Sudbury.

It is the latest evolution for the company which has survived many names, owners and challenges since its beginning as the Sudbury Brewing and Malting Company in 1907.

The city's write-off of $640,000 in back taxes was a key condition in six weeks of detailed discussions between Sharpe, Sudbury Mayor David Courtemanche and the city's economic development, finance and legal departments.

"In return for what has been done, we certainly will make sure it comes back ten-fold over the next number of years," said Sharpe.

Doug Nadorozny, Greater Sudbury's general manager of growth and development, says the deal would not have proceeded unless the new Northern Breweries started debt-free.

In fact, the brewery would likely have folded.

"They just couldn't afford to carry long-term debts over the years."

In late September, the city offered the company's Lorne Street property as a tax sale. There were no bidders on the property and it remained with the original owners.

Sharpe chose not to disclose the purchase price, nor would he identify anyone in his Canadian investors group, but did say they are looking for some additional private investment from Sudbury and Sault Ste. Marie.

He does not intend to ask for any public funding from senior levels of government.

Starting this month, the bulk of Northern's beer production will be temporarily shifted to Sault Ste. Marie while the Sudbury operation undergoes extensive renovations, expected to extend through to August.

The existing packaging line will be removed and more high-speed, cost-competitive production equipment will be installed including two new production lines for canned and bottled product, the packaging of new labels and, possibly, the introduction of some new formulas.

The shabby brewery will also receive a facelift to improve the building's facade and image.

Bottle production in Sudbury resumes Sept. 1, 2005, when renovations are complete.

Sharpe, who brings 45 years of experience in the brewing and beverage industry from stints at Canada Dry, Pacific Western Brewing, Carling O'Keefe and Molson's, has big plans for his newest asset.

Skilled at developing specialty, imports and import-style beer at Carling and Lakeport, including the successful President's Choice and Dave's Brand of non-alcoholic beer, Sharpe hinted he might expand Northern's existing portfolio of brands to "appeal to different taste buds."

He intends to attract "off-shore companies" and plans to close some contracts to bring product into Sudbury from some major international corporations for the North American market.

"One of the key things in running a successful brewery is covering all your overhead costs. To do that, it's a matter of bringing in other companies and producing their product for them, in addition to your own.

"It's my intention to go out of Canada and meet with other senior executives of other firms in the beverage industry."

While with Lakeport, Sharpe introduced the concept of co-packing as a way to aggressively build volumes and cover overhead costs.

Over the next few months, Sharpe and his associates plan to concentrate on building up the Sault's business by signing up wholesalers to distribute Northern beer state-side.

The Sudbury plant will serve an expanded Ontario market, shipping beer into Toronto, Ottawa, London and Windsor.

Sharpe said marketing and distribution will be key in winning back local beer drinkers as only a limited amount of licensed outlets in the Sudbury area sell Northern product.

www.northern-breweries.com

By IAN ROSS

Northern Ontario Business