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Speyside wins funds for Asian expansion

SPEYSIDE Distillers Company is planning for further international expansion with a major push into south east Asia as well as considering building another distillery.

TOAST: Speyside director John McDonough (right) and Murdoch MacLennan from Clydesdale Bank raise a glass.
TOAST: Speyside director John McDonough (right) and Murdoch MacLennan from Clydesdale Bank raise a glass.

The company, which has its head office and bond at Rutherglen and its distillery in Kingussie, has just secured a £4.3 million financing deal from Clydesdale Bank.

Around £1 million of that is being used for the acquisition and laying down of new stock to support the growth plans.

It has also invested in new casks over the past 15 months and taken advice from master distiller Jim Swan. Current brands include single malts Drumguish and Spey, with the latter among the most popular in its category in Taiwan.

Speyside Distillers employs 18 people in Scotland plus 50 people in Taiwan and a further five in China.

Some larger drinks groups, such as Diageo and Chivas Brothers owner Pernod Ricard, have seen a drop in demand for Scotch whisky in China as a result of measures to reduce conspicuous consumption.

However, Speyside Distillers is confident it can tap into the expected growth of malt whisky in China as well as Singapore, Malaysia, Vietnam.

John McDonough, director, said: "There is huge potential internationally for the Spey brand.

"We see the Chinese market as a key territory for us in the coming years and, with the consumer trend in the country moving towards single malts, we feel we're in a very strong position to build on the success we're already enjoying in Taiwan.

"The changes which have occurred in China have seen people enjoy greater freedom to travel, both within the country and internationally, and led to consumers becoming more inquisitive about whisky and learning more about the single malt whisky category, all of which is increasing interest in our brand."

The company expects turnover this year to be in the region of £4.7 million, which Mr McDonough said would be an eight per cent increase.

Alongside its plans in Asia growing distribution in Europe and North America is also on the agenda for the future.

Mr McDonough confirmed the company is pleased with progress in the likes of Italy, Germany, France and Switzerland while a North American launch takes place early this summer.

He said the focus is likely to be on the Spey brand.

The funding deal with Clydesdale Bank has already led on to further discussions including the possibility of adding another distillery.

Mr McDonough said: "Our strategy is to continue to build our international presence in the Far East but also to increase awareness of Spey in European and North American.

"Having reviewed our funding options in line with this strategy, we've found Clydesdale Bank to be extremely supportive of our plans for the business.

"We're already in discussions with them about our plans to raise additional funds to build a second distillery in Aviemore."

The Speyside distillery in Kingussie may be familiar to fans of BBC television series Monarch of the Glen as it was used as the Lagganmore distillery in the programme.

Murdoch MacLennan, head of business development for the west of Scotland at Clydesdale Bank, said: "The success which John and his team have been able to achieve in markets such as Taiwan bodes extremely well as they roll out their plans for further growth in the international marketplace."

Mr McDonough, a whisky dealer, led the deal to buy Speyside Distillers Company in September 2012.

HOE International, which trades as Harvey's of Edinburgh, bought the business for an undisclosed sum.

At that time it was reported Bank of Scotland was the Speyside Distillers Company's banking partner.

The most recent abbreviated annual accounts for the business, which cover the 2012 calendar year, show it had close to £5 million of stock on its balance sheet.

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