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Diageo To Boost Blended Scotch Production With New Highlands Distillery

April 3, 2013

As part of its ongoing five-year £1 billion ($1.5b) investment in its Scottish operations, Diageo has detailed a number of new moves, including plans for a new £50-million ($76m) distillery at Teaninich in the Highlands. The new site, which is slated for construction beginning next year, will have an output of 13 million liters annually from 16 copper stills. It will be adjacent to Diageo’s existing distillery in Teaninich, which is also being upgraded via a separate £12 million ($18m) investment to nearly double its capacity. Both sites will produce single malt whisky to be used in Diageo’s range of blended Scotch brands, which include Johnnie Walker, J&B, Bell’s and Buchanan’s, among others.

Meanwhile, Diageo will pump an additional £30 million ($45m) into its Speyside operations, including a project to increase output at the Mortlach Distillery at Dufftown, and the construction of a new green energy plant to power its Glendullan Distillery. Those initiatives build on recent Diageo investments in Speyside totaling more than £40 million ($61m).

Other plans within the £1-billion outlay announced last year include a “major expansion” of the Glen Ord Distillery and new warehousing at Cluny. Diageo currently produces nearly 50 million cases of spirits annually in Scotland at its 29 distilleries, with 85% of that production exported.

In other company news, Diageo’s open offer for a further 26% of India’s United Spirits Limited (USL) is said to be moving forward beginning April 10, according to the Wall Street Journal, which quoted an unnamed source. Diageo agreed last fall to take a 53.4% stake in USL in a two-part process totaling $2 billion, but its open offer to shareholders to complete the second half of the deal has been delayed since January as regulators scrutinized the proposed transaction.

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