A £1 billion investment in Scotch whisky production was welcomed yesterday as a boost to the whole Scottish economy.
Drinks giant Diageo announced plans for a major expansion in distilling capacity over the next five years, creating hundreds of jobs.
The company intends to build a new malt distillery as part of the investment, alongside a major expansion programme at a number of its existing distilleries. It also plans to invest in substantial new warehousing capacity to store the millions of additional litres of Scotch whisky which the distillation boost will produce.
The firm said the plans will create more than 100 new Diageo jobs across Scotland, mainly in rural areas.
In addition, it intends to take on about 100 apprentices and graduate trainees over the term of the investment, as well as encouraging its suppliers and construction contractors to focus on youth job creation and apprenticeships.
It is expected that an average of 250 construction jobs will be created for each year of the investment period.
The announcement follows the company's decision in 2009 to close its plant in Kilmarnock.
Diageo chief executive Paul Walsh said: "Scotch whisky is Scotland's most celebrated manufactured export, led by brands like Johnnie Walker, resonating with consumers from Boston to Beijing.
"We expect that success to continue, particularly in the high-growth markets around the world, which is why we are announcing this major investment in Scotch whisky production, committing over £1bn in the next five years, to seize that opportunity for global growth."
The location of the new distillery has not yet been decided.
Diageo plans to commit £5m over five years towards community initiatives as part of its sustainability and responsibility programme in Scotland.
Scottish Secretary Michael Moore said it was a "huge boost for the industry". He added: "The rise in global demand for our national drink is a result of the sector's quality and expertise in finding new markets, and this investment will ensure whisky continues to make a significant contribution to the Scottish economy and employment.
"The UK Government has played a key role in supporting the industry, from working to provide geographical indication protection for the product in countries around the world to providing the support of 2500 UK Trade and Investment staff and advisers."
Scottish Finance Secretary John Swinney said: "This major decision by Diageo provides continued evidence that new private sector investment will help to deliver economic recovery and demonstrates that Scotland is very much open for business and investment."
Murdo Fraser, Tory MSP and convener of Holyrood's Economy, Energy and Tourism Committee, said: "This is a massive commitment and will benefit the whole Scottish economy."
Dr Lesley Sawers, chief executive of the Scottish Council for Development and Industry, said: "We welcome this announcement as a vote of confidence in the skills and expertise of the Diageo team in Scotland and recognition of the growing significance of the global market for Scotch whisky.
"Over time this investment will have a positive impact on our shared ambition of the doubling of Scotland's exports over the coming decade and create much-needed employment, particularly in rural parts of the country. The SCDI team looks forward to working with Diageo as it continues to grow its Scottish presence."
Scotch whisky is the principal growth category for Diageo, representing 23% of the group's sales volumes and 27% of net sales value.
In the year to June 30, 2011, it shipped 17.8 million cases of Johnnie Walker, 4.6 million cases of J&B and 1.5 million cases of Buchanan's.
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