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Scotland—and its whisky—attractive to Indian partners

By RJ Whitehead , 03-Dec-2013

A delegation from Scotland to India, on a trade mission to promote the country’s food and drink, has proved a hit with its whisky-loving hosts—not least with the announcement shortly afterwards that an Indian company would invest in a new malt distillery in Fife.

The four-day visit was led by James Withers, chief executive of public-private organisation Scotland Food & Drink, and as expected the country’s national drink, which generates £4.3bn (US$7bn), came to the fore during talks with Indian businesses.

“We are hugely ambitious to grow our exports, and this is the first collective mission to India, as Scotland’s food and drink export is fast-expanding, and we know that India is a fast-developing market,” said Withers.

I believe that this visit has deepened the relationship that already exists between the two countries. I expect that the trade will grow from where it is currently.”

Indian partner

After the delegation arrived back on home soil, Kyndal Group, a major Indian trader in premium spirits, announced it has entered into a joint-venture with John Fergus and Co. to set up a new malt distillery and bonded warehouse in Glenrothes, Fife. 

The planning permission for the seven-hectare site has already been approved, and the facility is expected to be operational by 2015, with an initial annual capacity of around 4m litres that has the potential to be doubled, based on demand.

The project will focus on the export of malt whisky to markets in India, Africa and the Far East, and it is hoped that the plant will generate new shipments worth £3.6m (US$5.9) from Scotland over the next three years.

Exports from Scotland to India stand at £200m (US$327m), with Indian investors supporting over 2,700 Scottish jobs. According to Ian Palmer, managing director of John Fergus: “We chose India as our principal market because of its long-term growth potential and entrepreneurial spirit.” 

Siddharth Banerji, Palmer’s counterpart at Kyndal, believes potential trade agreements under negotiation with the European Union have the ability to boost India’s already burgeoning whisky market.

Premium brand

The Scotch whisky industry is currently enjoying a period of great demand and expansion, and now is the right time to be making such a bold investment.” he said. “The developments towards rationalisation in import duty structures would open up a large market for Scotch whisky

Kyndal, in partnership with John Fergus & Co., would like to maximise this huge opportunity. Together, we will launch high-quality premium Scotch and ad-mix brands in these markets.”

The company plans to start selling “good-quality” premium blended Scotch whisky commercially from 2018.

We will launch a brand by end of this year globally, so that we have a strong brand in place before we start selling whisky from our own distillery. Initially, we will get good-quality Scotch whisky from our partners,” Banerji said.

Kyndal currently operates in 15 countries in South and West Asia, and Africa, is also planning to enter the Latin America and the US markets once it starts selling Scotch whisky.

The new product is likely to be priced from Rs3,000 (US$48) per litre bottle in India. “There will also be a few products below this, but those would be India-specific products. However, we will only focus on the premium segment,” added Banerji.