William Grant builds Ayrshire Distillery

Published April 8, 2007

WILLIAM Grant & Sons, the family-owned distiller and one of Scotland’s biggest private companies, is to build a malt distillery in Ayrshire to meet booming demand from emerging markets.

The maker of the world’s best-selling single malt, the Glenfiddich, is understood to be investing up to £10m on its site in Girvan to expand both malt and grain production.

The news comes just weeks after Diageo announced it was building its first malt distillery in more than 30 years in Roseisle on Speyside.

The new distillery, yet to be named, will sit alongside the firm’s existing grain whisky distillery in Girvan. The site was previously home to its Ladyburn single malt distillery, which closed in 1975.

Containing four wash stills and four spirit stills it will take nine months to build. Senior management at the company are expecting the first spirit to flow from the stills by the end of this year with the whisky hitting the market in 2012.

Chief executive Roland van Bommel, who has just masterminded Grant’s best ever year financially, said the new facility will produce a high-quality single malt for blending.

He said: “Thanks to the continued profitable growth of our Scotch whisky brands and the likely increase in demand in the future with new markets opening up, there is a need to increase capacity and supply of malt whisky for blending.”

Last week the 121-year-old firm outlined its plans for a massive £23m global marketing push for its flagship Glenfiddich brand in an attempt to make it the world’s first single malt whisky to sell more than a million cases a year.

Sales of Scotch whisky are beginning to look very interesting as demand from expanding markets such as the US, China, Russia and India comes on stream.

Figures from the Scotch Whisky Association show that Scotch now accounts for a quarter of all of British food and drink exports by value.

More than one billion bottles were shipped in 2006, an increase of 6% on 2005, contributing £2.5bn to UK exports.

Last year shipments to China were up 27% to £58m, though the market is only the 10th largest in terms of value. The US is the biggest export market, with sales of £400m.

John Wakely, a former investment banker who has been analysing the drinks market for more than 20 years and is now a consultant, said: “If the BRIC (Brazil, Russia, India and China) countries do actually open up then we will see across the board increases in production. If that happens, for the first time in 25 years you may begin to get a bit of a shortage.”

Latest results show that Grant’s saw an 8.1% leap in pre-tax profits to £77.3m for the calendar year 2005. Turnover climbed to £352.6m, compared with £339.5m the year before.

The firm is currently looking for more acquisitions. In January it expanded into the tequila market with a 30% stake in Mexican brand Milagro. It also owns Cognac producer Raynal & Cie and Hendrick’s Gin, which sells more than 100,000 cases annually.

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