$20m boost for Speight's: 250% increase in production

Speight's brewery in Dunedin is getting a surprise $20 million redevelopment boost from its owner, Lion, to replace lost brewing capacity in Christchurch, with job numbers more than doubling to 27 once it is completed.

Christchurch's February quake extensively damaged equipment in Lion's Canterbury brewing site, at St Asaph St within the city's CBD quake cordon, preventing brewing.

Dunedin transport sources have reported a "massive" 150% increase in the number of kegs in the once weekly consignments heading north since the quake - up from 400 kegs to more than 1000 at times.

Lion, which rebranded last week from Lion Nathan, yesterday announced a $43 million reinvestment package across three sites in which Dunedin will have its keg-producing capacity and home brew kit numbers increased, with the upgrade construction and commissioning to be completed by December 2012.

Actual beer brewing on its own will increase 250% in Dunedin.

However, Dunedin will also become the new site for the sideline business of malt extraction from partially brewed beer.

The malt goes to home brew kits sold globally, and as a baking ingredient.

The company's plant in East Tamaki, Auckland, will take over brewing other specialty beers such as Guinness and Stella Artois, and continue to bottle and can Speight's.

A further $15 million will be spent at the existing Canterbury brewing site to redevelop it as the main South Island distribution centre.

Otago Chamber of Commerce chief executive John Christie welcomed the boost to Speight's production, albeit coming "out of the tragic events Christchurch has had to endure".

"It's a return to the good old days of quality beers being produced in Dunedin, alongside our successful boutique breweries," Mr Christie said.

Lion acting managing director Rory Glass said recent inspections of the St Asaph St site had revealed the brewhouse and packaging hall were "damaged beyond repair" and Lion would be unable to brew beer again in Christchurch "in the foreseeable future".

"We are very mindful of the impact that these decisions will have on our Christchurch people - who are already dealing with the ongoing challenges of life in the aftermath of February's devastating events," Mr Glass said in a statement yesterday.

The reinvestment is funded from Lion's cash reserves.

Job numbers in Dunedin would increase from 11 to 27, while across the South Island a total of 22 jobs would be lost.

Lion would retain 70 employees around Canterbury.

Of 38 positions affected in Christchurch, Lion hoped the majority could be redeployed to new positions.

If not, affected staff would be offered a "comprehensive redundancy" package.

Dunedin's Speight's brewery, which is also a top tourist attraction, will be upgraded with the building of a new brewhouse and the improving of cellars and kegging facilities.

Mr Glass said the redevelopment would also introduce a greater level of technology and automation into the the Dunedin brewery.

The new $15 million distribution centre on the Christchurch site would be built to meet new earthquake codes and also include a "significant" investment in new technology, he said.


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