One of the UK’s leading malting companies – Bairds Malt – says it is on track to complete construction of a new malting plant at its Inverness site next spring.
The firm, which also has sites in Arbroath, Turriff, Pencaitland near Edinburgh, and Witham in Essex, made the comments in its latest accounts.
It said a £51 million project to expand its facilities at its Arbroath and Inverness sites was progressing, despite Covid-19 delays, and a £40m long-term loan had been secured to fund the plans.
In his report accompanying the accounts, Bairds Malt Limited’s company secretary, Brett Weimann, said the investment would create an additional 79,000 tonnes of annual malting capacity by upgrading the Arbroath site and building a new state-of-the-art malting plant in Inverness.
The Arbroath expansion is adding 22,000 tonnes of additional malt capacity, while the Inverness site will add 57,000 to the company’s Scottish capacity.
“The new capacity will enable the company to build on its strong relationships and remain a supplier of choice across the Scottish distilling sector,” added Mr Weimann.
He said work commenced at both sites in the 2019/20 financial year, with the Arbroath expansion work completed in February this year.
“The Inverness expansion is expected to be complete in May 2022 and has been slightly impacted by Covid secure requirements resulting in less tradespeople able to be on site,” added Mr Weimann.
“In addition, in February 2021 the company agreed a lease extension with the landlord on the Inverness site thereby securing the site for a further 99 years.”
Turnover and profit
The accounts, which were filed with Companies House and cover the year to September 30, 2020, show a reduction in both turnover and pre-tax profits.
Turnover was down 5% to £127.7million, from £135m the year before, while pre-tax profits decreased by 78% to £2.23m.
Mr Weimann said the Covid-19 pandemic has had a “significant impact” on the company, and during the crisis a number of its facilities were either closed or running at greatly reduced capacity as a result of reduced demand.
He said the company was affected by a decline in beer consumption due to Covid-19 lockdowns, and although sales to the brewing sector were up 8% in the financial year, they were below expectations.
The decline has continued and Mr Weimann said Bairds took the decision to consolidate its brewing operations to one site in England resulting in the closure of its plant in Grantham, Lincolnshire.
“A great deal of uncertainty still exists, which could impact the company within the brewing sector,” added Mr Weimann.
He said although demand for malt from the whisky industry remained strong, the Covid-19 pandemic resulted in a 7% reduction in deliveries to distillers during the financial year.
“The prospects for 2021 deliveries into UK distilling are indicating an increase in volumes compared to 2020,” added Mr Weimann.
“The directors consider the company to be well positioned to address commodity price movements and the competitive malt markets across Europe and are confident that, given the current funding, the company is well positioned to develop opportunities in both the brewing and distilling sectors.”
More beer and whisky sales boosts Arbroath-based Bairds Malt