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Diageo expands Indonesia spirits site
Drinks giant Diageo has announced plans to expand its production site in Bali to “better service customers and consumers across Asia Pacific”.
Diageo is adding 8,800 square metres to its existing site in Tabanan, Bali. According to Just Drinks, the spirits giant declined to confirm the current size of the facility, built in 2014, and could not comment on how much capacity might increase.
Its Indonesian production site produces Diageo brands including Captain Morgan rum, Smirnoff and Smirnoff Ice vodkas, Gilbey’s gin and Bell’s Scotch whisky for the Indonesian market.
The company began exporting its Smirnoff and Captain Morgan brands produced at the facility to Malaysia, the Philippines, Singapore, Thailand and Timor Leste from 2021.
John O’Keeffe, president and CEO of Diageo’s Asia Pacific division, said in a statement: “The expansion of our strong supply hub in Bali is key to our wider regional strategy to better service customers and consumers across Asia-Pacific and contribute to Diageo’s global ambition.”
The site, once expanded, will boost the Asia Pacific unit’s “contribution to Diageo’s overall product sales and business worldwide”, the company said.
Diageo’s Asia Pacific business comprises seven markets: India, Greater China, Australia, Southeast Asia, North Asia and Travel Retail Asia and Middle East.
A fifth (19%) of Diageo’s total net sales for the year ended 30 June 2024 came from Asia Pacific, according to the group’s annual report.
In its fiscal year, the region booked the largest volumes out of all its markets, at 74.9 million equivalent units. Reported net sales sat at $3.8bn for the period, a 1% decline on fiscal 2023. Volumes were down 7%. On an organic basis, net sales rose 4% and volumes inched up 1%.
India is by far Diageo’s biggest market in the region, but Southeast Asia offers new opportunities.
In September, Thailand signed a trade deal with the UK designed to boost trade and investment between the two nations and open the country up to British businesses. Scotch whisky is set to benefit, and Debra Crew, Diageo’s chief executive, said the company hoped the partnership “will be the first step towards resolving costly trade barriers, such as those affecting Scotch whisky”.
She said of the trade deal: “ASEAN [Association of Southeast Asian Nations] is one of the world’s most vibrant and dynamic regions, full of opportunity for Scotch whisky. We warmly welcome the UK’s participation in the Asian Economic Dialogue and the new Enhanced Trade Partnership with Thailand which will boost trade and investment in this important region. Read more here.
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