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Edrington Group expanding Scotch production capacity

June 18, 2013

FAMOUS Grouse maker Edrington is preparing to follow in the footsteps of larger rivals Diageo and Pernod Ricard by expanding its production as the whisky industry gears up to sate the continuing overseas thirst for Scotch.

The group – which also produces Cutty Sark, Highland Park and The Macallan – is running the rules over plans to increase output from its distilleries as it prepares to post its full-year results in a fortnight’s time.

Chief executive Ian Curle told The Scotsman that the company is more likely to expand its current sites rather than building another distillery, although all options were still open.

“Over the next two or three years we will probably put additional capacity into some of our existing sites,” he said.

“Like many of our competitors, we’re seeing a positive outlook for the years to come.

“We’re still looking at the numbers but it could well be a significant expansion. We’re evaluating the options but it’s more likely to be around our existing distillation sites.

“I don’t think we’d be thinking about greenfield developments.”

News of Edrington’s ramp-up of production comes amid a flurry of expansions within the Scotch industry.

On Friday, French spirits giant Pernod Ricard – which owns Paisley-based Chivas Brothers, Scotland’s second-largest distiller and the owner of labels including Chivas Regal, The Glenlivet and Royal Salute – signalled its commitment to increasing production in Scotland despite a slowdown in sales growth in the Chinese market.

Chivas Brothers is building a facility at Carron, on the banks of the River Spey, at a site previously occupied by the Imperial distillery, having already re-opened its Glen Keith unit and expanded Glenallachie, Glentauchers, Longmorn and Tormore.

In April, arch-rival Diageo – the biggest Scotch distiller and maker of Bell’s, Johnnie Walker and Talisker – selected Teaninich near Alness in Easter Ross as the site for its next £50 million “super-distillery”, following on from the opening of Roseisle near Elgin in 2010.

Curle’s comments came as Edrington unveiled a £10m expansion of its overseas distribution network, bringing work in-house that was previously contracted out to third parties. Under what Curle described as a “step-change” in its business, Edrington will take control of its own distribution in the Middle East, south-east Asia and the United States. Together, the three markets account for about 26 per cent of total sales at the group, which is owned by the Robertson Trust, a charity that shares its profits with good causes.

Curle said: “Today’s announcement marks a step change in Edrington’s business. Worldwide demand for premium and super-premium spirits continues to grow and by expanding our distribution capabilities so significantly we are seizing the opportunity to increase investment in our brands.”

Under the plans, Edrington USA will take over distribution across the Pond from Rémy Cointreau USA. In the Middle East, Edrington FIX – a joint venture with FIX Wines & Spirits – will launch on 1 August, while Edrington Singapore will take over from Beam Global Asia.

Edrington’s profits in the year to 31 March, 2012, rose by 5.2 per cent to £148.8m, on the back of a 0.5 per cent increase in sales to £556.1m.

Source: The Scotsman

http://www.scotsman.com/business/management/famous-grouse-maker-in-10m-expansion-1-2969165