Australia: United Malt Group to upgrade Perth operations to enable future capacity expansion

United Malt Group will spend A$27 million upgrading its Barrett Burston Malting operations in Perth during the next 12 months, the Farm Weekly reported on September 4.

Barrett Burston will replace the existing kiln at its Welshpool facility with a new and indirect heating source kiln to improve the efficiency and safety of the plant.

The larger kiln will also enable future production capacity expansion of up to 110,000 tonnes - up from 50,000 tonnes.

The project, which is expected to be completed by October next year, follows the newly listed company recently raising A$170.6 mln from shareholders to "progress strategic objectives".

Managing director Mark Palmquist said the upgrade was part of a broader strategy of continued investment in the global maltster's assets.

United Malt is also reviewing opportunities across its North American businesses to reduce production costs and increase capacity.

United is the biggest commercial maltster in North America, which is the source of more than 60 per cent of its total earnings.

"We remain focused on delivery against our strategic priorities to create best in class operations to better service our customers," Mr Palmquist said.

"The Welshpool facility is strategically located in close proximity to Western Australia's high quality barley growing region and is also well situated to meet increasing demand both domestically and in exports to Asia."

A larger capacity kiln provided the flexibility to focus on targeting high value markets "where the long-term outlook for growth remains supportive".

Internationally United Malt has about 1.25 million tonnes of processing capacity across 13 processing plants in Canada, the US, Australia and Britain.

It also operates an international distribution business, which provides a full service offering for craft brewers and distillers, including malt, hops, yeast, adjuncts and related products.

Barrett Burston's three Australian malting plants in Perth, Melbourne and Brisbane provided about seven per cent of the former GrainCorp-owned company's A$1.3 billion revenue in 1018-19.

Aside from its malt plants, the company's warehouse and distribution segment in the US, Australia, New Zealand and the UK generate about 27pc of company revenue from sales and supply of bagged malt and ingredient products.

The division has a strong focus on the craft beer segment which has expanded rapidly in North America in the past decade and gaining pace in Latin America and Asia.

While Mr Palmquist said the coronavirus pandemic's social movement restrictions had hurt on-premises alcohol sales, particularly smaller craft beer brands, the brewing industry had been innovative in adjusting to retail restrictions and meeting increasing home consumption trends.

Total beer sales appeared to be tracking at only about 10pc lower than pre-COVID19 levels.

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