Drinks giant Diageo this week unveiled plans for a £150m bonded warehouse site in Fife which should create up to 200 long-term construction jobs and around 40 operational posts.
The firm will shortly submit a planning application to Fife Council seeking permission to build 46 warehouses for the maturation of Scotch whisky at Begg Farm near Kirkcaldy.
The development would take up to seven years to build out and transform around 350 acres of a site which once was used an open-cast coal mine.
Diageo is keen to build the warehousing to support increased production of Scotch at its Cameronbridge distillery and reduce transport costs to its maturation site at Blackgrange in Clackmannanshire, the largest of its kind in Europe.
If given the go-ahead, the new centre would see Diageo’s investment in Fife where it already employs more than 1,200 people increase to around £350m in the past four years with £100m being spent on a upgrade of Cameronbridge and a further £86m on a new bottling plant at Leven.
Richard Bedford, grain distilling director, Diageo Europe Supply, said the new warehousing is needed as a result of a significant increase in demand for whisky globally.
Diageo has just posted six-month pre-tax profits up 15% to £1.86bn on the back of its whisky sales performance in which the flagship Johnnie Walker brand saw a 15% increase and super-deluxe variants enjoyed a 29% uplift.
”This is about the growth of Scotch whisky. The value of Scotch as an export to the Scottish economy is huge,” Mr Bedford said. ”I think sales are going to continue to grow over the next 12 years that is how long it takes to make Johnnie Walker Black Label and that means we need more warehouses.
”We wanted a big site and we looked at various options across Fife and Clackmannanshire. What this site has got going for it is scale it is big enough for us and it is very close to the A92.”
Mr Bedford said the scale of the project would mean significant long-term work for the local construction trade.
He said: ”Currently the expectation is that we would be building about six warehouses per year so it would be about a seven-year period to build up that site. In terms of construction jobs we estimate that from the warehouses we have built in the past there is about 1,500 man years of construction work there. That might be 200 people working there for seven years it is a very big construction job.
”We have not been out for detail design or spec or tendering yet but the ballpark investment would be £150m. That could easily be give or take £20-odd million as we don’t know the outcome for the detailed ground survey, or the plant that we would want to install.”
Mr Bedford said the new facility would add the missing dimension to Diageo’s operations in Fife and allow end-to-end whisky production.
He said: ”We have got some fantastic options in Fife with a great workforce and great facilities and we have an opportunity to be really, really efficient and effective for manufacturing. It is a great home for us.”Warm welcome for plansThis week’s announcement was warmly welcomed in Fife but it will have to overcome planning obstacles, with land at the former opencast coal site not zoned for industrial use according to the Mid-Fife Local Plan.
Fife Chamber of Commerce chief executive Alan Russell urged the council to ensure the local plan does not get in the way of much-needed employment.
He said: ”This proposal by Diageo to invest in a new warehouse facility in Kirkcaldy is further evidence of the company’s commitment to Fife. This investment is important to the company and in the current climate the new jobs are extremely valuable to the area.
”While the proposal may be contrary to the local plan, plans can be amended, and I would hope that Fife Council will pull out all the stops to make sure this investment is secured for Kirkcaldy and Fife.”
A planning application is expected to be lodged with the council as early as next week.
Kirkcaldy MSP David Torrance said: ”I wholeheartedly welcome the proposal for the Cluny site because anything that brings jobs in this economic climate is great news for my constituency.
”I think it’s great news for the area that Diageo are building all these extensions to their existing plant at Banbeath and the new bonded warehouse will bring badly needed extra jobs to the Kirkcaldy area.
”There is massive investment by Diageo throughout the Levenmouth and Kirkcaldy area, which means they are going to be here for a long time and jobs have been secured for the future. It will boost the local economy.”
Photo by Danny Lawson/PA Archive