Scottish maltster, Simpsons Malt, has invested £12 million to increase malting capacity at its Berwick-on-Tweed plant.

The move, which will see capacity increased by 40,000 tonnes to 180,000 tonnes, follows the closure in recent years of malting plants at Carnoustie, Kirkcaldy and Kirkliston.

The closures were blamed on poor returns for malt and concerns that a shortage of malting capacity could limit the uptake of malting barley from Scottish farmers.

Distillers have warned they may have to import more malt to meet the soaring world-wide demand for Scotch whisky.

Tim McCreath, Simpsons’ managing director, welcomed the recent strengthening of the malting barley market, which has seen contract prices for this year’s harvest rise by £40 a tonne compared with last year, and the offer of longer-term contracts by distillers to secure future supplies.

“The price of malt and therefore malting barley has been undervalued for the last few years,” said Mr McCreath.

“We have seen a more realistic value returning to the malt market this year and higher prices have to be passed down to growers to make malting barley a competitive and sustainable option.”

Simpsons said it has secured several long-term deals with distillers and a major brewer which justifies its investment in new plant.

The company sources most of its malting barley requirements from the Borders, Lothians and Northumberland. It also has sites in Norfolk and Essex, with total malting capacity reaching 270,000 tonnes.

Trade sources believe the rise in the malting barley price has been enough to halt the decline in the spring barley area in Scotland.

It is expected that the June census will confirm the area down to spring barley has stabilised.