By Andy Young

Australian grain company GrainCorp has announced plans to more than double malt production capacity in the US, as it targets the North American craft brewing sector.

Production as its Great Western Malting facility will be increased by 120,000 tonnes, bringing the plant's annual malting capacity to 220,000 tonnes.

GrainCorp managing director & CEO Mark Palmquist said a significant proportion of the new capacity would be underpinned by long term supply agreements and relationships with major customers. The balance of the capacity will enable GrainCorp to increase its exposure to sustained demand growth from the North American craft brewing sector.

"We are very excited about the opportunities for GrainCorp Malt arising from the ongoing growth in demand for malt, particularly from craft brewers," Mr Palmquist said.

"The craft sector in the United States has been growing consistently at 10-15 per cent per annum over recent years and is expected to make up 20 per cent of that country's beer market in the next five years. The fact that craft beer consumes larger quantities of malt per litre also means that existing malting capacity is under some pressure.

"It is pleasing that we are in a position to take advantage of this step-change opportunity which extends our growth within the Malt group. Investing in our supply chain, supporting customer growth and positioning ourselves to capture further value within the craft beer sector is perfectly aligned with our focus on building out the more reliable earnings streams within our business," Palmquist added.

GrainCorp confirmed that it will be investing around US$75 million in the project and that work will begin in the third quarter of 2015, subject to planning approvals. The expansion is expected to be completed around the middle of the 2017 calendar year.

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The Shout Team

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