Diageo expands spirits manufacturing facility in Indonesia, proposes redevelopment of Talisker distillery

INDONESIA – Diageo, the producer of renowned brands such as Johnnie Walker and Smirnoff, has commenced the expansion of its spirits manufacturing facility in Tabanan, Bali, Indonesia.  

The company aims to strengthen its production capabilities to serve key markets in the Asia-Pacific region.  

The expansion will add 8,800 square meters to the facility, although Diageo has not disclosed the current size or the expected increase in production capacity. 

Originally built in 2014, the Tabanan facility produces several of Diageo’s flagship brands, including Captain Morgan rum, Smirnoff vodka, Smirnoff Ice, Gilbey’s gin, and Bell’s Scotch whisky, primarily for the Indonesian market.  

However, since 2021, Diageo has expanded exports from this site to additional markets, including Thailand, Timor Leste, the Philippines, Singapore, and Malaysia. 

John O’Keeffe, President & CEO of Diageo’s Asia-Pacific division, commented, “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 expanded facility is set to open within the next 18 months and will operate with 95 percent less energy than traditional production methods, aligning with Diageo’s global sustainability goals.  

Once operational, it is expected to enhance the Asia-Pacific division’s contribution to Diageo’s global sales and business. 

In fiscal year 2024, Diageo reported that 19 percent of its total net sales came from the Asia-Pacific region, with a volume of 74.9 million equivalent units, the largest volume of any of its markets.  

Despite this, the region experienced a 1 percent decline in reported net sales to US$3.8 billion and a 7 percent drop in volumes compared to the previous year. 

Talisker distillery redevelopment 

In addition to the Indonesian expansion, Diageo has submitted a Proposal of Application Notice (PAN) for the redevelopment of its Talisker Scotch whisky distillery on the Isle of Skye, Scotland.  

The proposal includes demolishing the existing production facilities and constructing a new, more sustainable distillery to expand Talisker’s output. 

Diageo emphasized that public consultation will be a key part of the proposal process. While the redevelopment is still in the planning phase, the company is committed to exploring potential options to support its long-term growth ambitions for Scotch whisky. 

In its fiscal 2024, Diageo saw reported net sales for Scotch drop by 6 percent, with organic sales falling 10 percent, primarily due to inventory reductions in the Latin American and Caribbean markets.  

Organic volumes also declined by 7 percent. The proposed redevelopment of the Talisker distillery aims to address some of these challenges and support future growth. 

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