United Malt Group will close one of its five malt houses in the UK next month. Bairds Malt, the UK subsidiary of the Australian-based maltster announced today to shutter its 56-year-old malting in Grantham in the district of Lincolnshire, England, in March.
In January 2018, the Grantham malting was severely damaged following a large fire. Only 5 months later another fire destroyed approximately 20 tons of barley malt and a malt kiln suffered extensive damage from heat and smoke. The two fires did not immediately lead to the closure, however, they may have sped up the decision to close the old and inefficient malting plant.
The closure will result in costs of about AUD 1million (USD 0.8m) in redundancy payments and AUD 2 million (USD 1.6m) to United Malt's balance sheet through non-cash asset impairments. 15 people will lose their job.
"We do not take the decision to close any facility lightly and we fully appreciate the impact this has on our people at Grantham and the community," said United Malt Group’s managing director Mark Palmquist. Consolidating malt production into more efficient sites would result in greater asset utilization, optimized production efficiencies, lower energy costs, and reduced waste and water use across the group, he added.
The Grantham Malthouse has a capacity of 30,000 tons but has reportedly only supplied 14,000 tons to distilling and brewing customers in the past two and a half years. Most of the clients are traditional UK brewers. Those will be served in the future from two other plants of the group in Witham in England and Arbroath in Scotland. In addition, Baird’s runs two more plants in Scotland, in Inverness and in Pencaitland.
The closure will not result in lower production of the group because the company is adding at the same time 79,000 tons of capacity per annum to two of their Scottish malt houses.
The commercial production of additional 22,000 yearly tons will start next month at the Abroath plant. Works had to be temporarily stopped last year after the UK government halted all non-essential construction as part of its COVID-19 response (inside.beer, 18.5.2020) but could soon be restarted.
An enlargement of the new Inverness plant will increase capacity by another 57,000 tons per annum. The construction started in August last year and is expected to be completed in May 2022, five months later than originally planned.