Indonesia: Diageo expanding manufacturing facility in Indonesia

Diageo is expanding a spirits manufacturing facility in Indonesia that supplies a clutch of markets in Asia Pacific.

The company is adding 8,800 square metres to the site in Tabanan in Bali. Diageo declined to confirm on the current size of the facility and could not comment on how much capacity might increase.

Built in 2014, the factory produces Diageo’s Captain Morgan rum, Smirnoff and Smirnoff Ice vodkas, Gilbey’s gin and Bell’s Scotch whisky, for the Indonesian market.

In a statement, John O’Keeffe, president & CEO of Diageo’s Asia-Pacific division said: “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.”

In 2021, the company also began exporting its Smirnoff and Captain Morgan spirits from the facility to Thailand, Timor Leste, the Philippines, Singapore and Malaysia.

Once operational, the newly expanded site is expected to help boost the Asia-Pacific unit’s “contribution to Diageo’s overall product sales and business worldwide”, the company said.

The expanded site is expected to open in the next 18 months, the Tanqueray gin maker told Just Drinks.

When construction is complete, the expanded site is also expected to be running on “95% less energy than traditional production methods”.

According to the group’s annual report, which grouped together its fiscal results for the year ended 30 June 2024, 19% of Diageo’s total net sales came from Asia-Pacific.

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 Diageo’s largest market in Asia-Pacific.

Net sales in South East Asia specifically were down 8% on a reported basis and 4% organically. Reported and organic volumes for the region dipped 8% and 9% respectively in the year.

Diageo pointed to the impact of “lapping double-digit growth in the prior year” and a “double-digit decline” in Vietnam, most notably from Johnnie Walker whisky.

However, the company said it had seen a “strong performance” from The Singleton whisky “across most of the market”.

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