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Diageo unveils £500m distillery construction plan

6 Jun 12 Drinks giant Diageo has unveiled plans to spend £500m on the construction of a new malt whisky distillery and warehousing, and on the expansion of existing distilleries.

The work is part of a £1bn investment in Scotch whisky over the next five years.

As well as the major new malt distillery that will be built in Speyside, Diageo is also drawing up plans for a second new distillery that will be built if global demand for Scotch is sustained at expected levels.

Chief executive, Paul Walsh said: “This is a pivotal moment in the development of the Scotch whisky category for Diageo. Over recent years our brands have achieved remarkable, sustained global growth. Scotch whisky is Scotland’s most celebrated manufactured export, led by brands like Johnnie Walker, resonating with consumers from Boston to Beijing.

“We expect that success to continue, particularly in the high growth markets around the world, which is why we are announcing this major investment in Scotch whisky production, committing over £1bn in the next five years, to seize that opportunity for global growth. “

It is expected that the investment will create an average of 250 construction jobs for each year of the investment period. Diageo will encourage its suppliers and construction contractors to focus on youth job creation and apprenticeships.

Diageo also aims to reduce its environmental impact and has a programme of bio energy solutions to be implemented over the same timescale as the distillery expansion projects.

In the last five years Diageo has reported 50% growth in net sales of its Scotch brands with total net sales approaching £3bn this financial year.

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