EAST Kilbride-based Burn Stewart Distillers has set its sights on ramping up whisky production and moving into new international markets following its £160 million acquisition by African drinks giant Distell Group.
The distiller behind the Black Bottle, Bunnahabhain and Scottish Leader brands has been bought by Distell, one of Africa's leading wine and spirits producers, from Trinidad and Tobago-based CL Financial.
The acquisition has seen South-African-based Distell take 100% of the equity in Burn Stewart, including its brand portfolio, distilleries on Islay, Mull and in Deanston near Stirling, the head office and bottling hall in East Kilbride and blending and warehouse facilities at Airdrie.
It builds on a joint venture established by Burn Stewart and Distell in 2007, which has seen the two companies co-own and market Bunnahabhain, Black Bottle and Scottish Leader in sub-Saharan Africa.
Burn Stewart managing director Fraser Thornton said the joint venture meant there has "been a marriage waiting to happen" between the two firms, but insisted takeover talks had only taken place in recent months.
Mr Thornton said: "It puts the business in the hands of a committed, financially secure shareholder that wants to invest in its long-term future.
"One of the things CL Financial struggled with, because of their own financial issues, was freeing up any investment that could come into the business.
"Under Distell, there is no question it is a large well-financed, financially secure group, and it will be able to make investment available into the business."
Mr Thornton said the distiller hopes to grow sales in African markets beyond South Africa, where its brands should gain from Distell's distribution muscle.
In the Far East it will look to move into new markets on the back of its sales and marketing operation in Taiwan, where Scottish Leader, its biggest brand, has a strong presence.
Mr Thornton said efforts will be made to boost production and inventory levels to help meet long-term export targets, continuing a process Burn Stewart has already commenced.
However, it is not just abroad that the company is looking to boost sales. In the UK, where the company has been prioritising sales values over driving volumes, he said the brands have been performing "relatively well", in spite of a challenging excise duty regime.
Mr Thornton added that further jobs could be added at East Kilbride as Distell looks to grow the business.
He said: "You can't get growth without people. As part of a growing business, we will no doubt look to add to our overall headcount as we move forward.
"It is certainly not about reducing headcount; that is not the aim of the business at all."
The sale of Burn Stewart follows a turbulent period for previous owner CL Financial.
The group's Clico insurance and financial services suffered a liquidity crisis that led to it being bailed out by the Trinidad & Tobago government in 2009. It was feared the problems would affect other parts of the conglomerate.
The state provided loans for the business and took seats on the board. Those loans have still to be repaid.
Since those difficulties, CL has been looking to sell assets, and in January off-loaded Lascelles DeMercado, the company behind the Wray & Nephew and Appleton Jamaican rum brands, to Gruppo Campari.
However, Mr Thornton said it was only recently that CL had explored the sale of Burn Stewart.
He explained: "I think it is quite logical they would look to assets that are potentially harder for them to directly manage. Being a Trinidad-based group, it is easier to sell assets that are 5000 miles away than 50 miles down the road.
"And I think they also felt the timing was good. Economies have started to recover, there is availability of cash in large groups and I guess ultimately the price was something they felt comfortable with."
Mr Thornton added that the acquisition reflected the still growing demand for whisky in markets around the world.
The most recent figures from the Scotch Whisky Association suggested the value of exports reached a record high last year, rising by 1% to £4.27 billion, in spite of a 5% drop in the volume shipped overseas to 1.19 billion bottles.
Mr Thornton said: "It is a good news story for the Scotch whisky industry. It is further reassurance that many people outside of the industry share the same expectation, belief and confidence of long-term growth with the industry."
Meanwhile, Burn Stewart said production at its Tobermory distillery on Mull would recommence "imminently" after a water shortage forced it to suspend operations last week.
Mr Thornton said: "It is a periodic thing, it happens not infrequently. If we get a period without rainfall we cut back on distillation for a few weeks and let the water levels top up. We will be back in business imminently."
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