GrainCorp is to spend almost $100 million expanding its Bairds Malt capacity in Scotland to help keep pace with growth in the barley malting sector and demand from whisky distillers.
The United Kingdom business division of GrainCorp Malt, will add a total of 79,000 tonnes of annual malting capacity by upgrading its Arbroath facility and building a new state-of-the-art malting plant at its Inverness site.
The capacity upgrade is expected to take about three years.
The program will cost about $94 million, lifting Bairds Malt’s total annual capacity to more than 300,000 tonnes.
Managing director of the big eastern Australian grain business, Mark Palmquist noted the past 15 years had seen 29 new distilleries built in Scotland, taking the number to about 120.
Large existing distillers were also expanding production capacity.
Mr Palmquist said Bairds had a long and proud history supplying high quality malt as the primary ingredient in some of the world’s finest and best-known whiskies.
“The new capacity will enable us to build on our strong relationships to remain a supplier of choice across the Scottish distilling industry,” he said.
“Both our Inverness and Arbroath facilities are strategically positioned close to key customers and with good barley supply.”
He said the distilling malt market in Scotland had been growing steadily since 2004 and it had a long-term focus thanks to increasing global demand for aged whisky.
“We expect to underpin the majority of the new capacity ahead of construction through new or extended long-term agreements,” he said.
GrainCorp will fund the expansion from cash flow and existing debt facilities spread across the current financial year and into 2020-21.
The move comes as GrainCorp Malt prepares for a leadership change after long-time malt industry player Greg Friberg this month confirmed he would be stepping down as the division’s president.
Chief operations officer, Darren Smith, will take over on January 1.
Mr Friberg, who has had 37 years in agribusiness and 21 years in the malting industry, he will remain as a temporary adviser to the company during early 2019.
His North American replacement, Mr Smith, has also previously worked with GrainCorp companies, Canada Malt and Great Western Malting in Canada and the US.
Mr Palmquist paid tribute to Mr Friberg’s past five years at GrainCorp Malt’s helm saying the consistently strong performance of the malt business unit in recent years was testament to his passionate focus on customers.
“Under Greg’s leadership GrainCorp Malt has established an excellent position and reputation with brewers and distillers,” he said.
“It’s pleasing to fill such an important role with an outstanding internal candidate in Darren.”
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