FRENCH drinks giant Pernod Ricard is to follow arch-rival Diageo in building a new distillery in Scotland to cater for burgeoning international demand for whisky.

Pernod's whisky and gin business Chivas Brothers has begun the planning process for a new malt whisky distillery on the banks of the River Spey near the village of Carron.

It will increase Pernod's malt whisky output by 10% to 15%. The spirit will be used primarily in Pernod's blends which include Chivas Regal, Ballantine's and Royal Salute.

Chivas Brothers' chairman and chief executive Christian Porta said: "Our success in growing our brands across the world, in existing and new markets, to many historical highs means that creating new distillation capacity is a key next step for our business.

"This new distillery will supply high quality Speyside malt whisky for many of our blends in the years to come."

Chivas Brothers previously set out plans to boost malt whisky distillation capacity by 25% by April 2013 with the re-opening of the Glen Keith Distillery at the beginning of next year and expansion of four existing Speyside distilleries.

Pernod previously reopened Allt A'Bhainne in 2005 and Braeval in 2008.

It also increased the capacity of the Glenlivet distillery, home to its flagship single malt, by 75% in 2010.

As reported by The Herald in February, these projects left Pernod with little scope to boost capacity at any more existing distilleries and the company started considering new-build plans.

Meanwhile, arch-rival Diageo, the company behind Johnnie Walker, last month submitted pre-planning applications for three sites in Speyside and Ross-shire, one of which it will choose for a new 13 million-litre malt whisky distillery.

In 2010, Diageo opened the £40 million Roseisle on Speyside, the first major new malt distillery built in Scotland for 30 years.

The companies are investing in capacity in anticipation of con-tinued rising demand from emerging markets.

However, problems in the eurozone have weighed on the industry in recent months.

Exports stalled in the first half of 2012, according to figures from the Scotch Whisky Association.

The new Pernod plant will occupy the site of the Imperial Distillery which closed in 1998. Pernod acquired it with its purchase of Allied Domecq in 2005.

Pernod said the new distillery would use new technology, such as heat recovery systems to recoup energy from the distilling process. It also intends to blend the buildings in with the surrounding scenery and fit in with local architectural styles.