The company says that it will plough €650m into its network of Irish breweries, with the Dublin site becoming the second biggest in the country as part of an operational shake up that will result in the closure of its Kilkenny and Dundalk plants.
St .
James's Gate Amidst growing demand in emerging markets like Africa for Guinness, speculation has mounted that the group could capitalise on the high land values in Dublin city centre and relocate to a new production site to address the changing market for the brand.
However, the brewery at St .
James's Gate has been the spiritual home of the world famous tipple since 1759, as well as a major destination for tourists from around the globe.
As part of the investment plan therefore, the site will be expanded into what the company says will be a centre of excellence for production of the brand, while two other plants will be shut to make way for an additional plant outside Dublin to supply export demand.
About 250 jobs are expected to be lost across the company's operations as a result of the refocus, Diageo said.
Diageo chief executive Paul Walsh said the investment was the largest yet made in the company's ten-year history, representing a significant shake up of the group's brewing operations.
"This proposal will support the long-term success and growth of Guinness around the world, as well as the other beers we brew for Ireland , Great Britain and international markets," he stated.
"Our ambition is to create a brewing hub, which will meet the highest standards of technology, efficiency and environmental management."
As part of the strategy, St. James's Gate will be upgraded to deal with the bulk of Domestic and UK demand for Guinness, with additional investment in the on-site storehouse to cater for expected tourist visits in excess of one million people a year, Diageo said.
Surplus land created as part of the development will be put up for sale to developers.
New site By 2013, work is also expected to be completed on an entirely new production facility planned to be built near to its existing Dublin site, which will become the country's largest brewery.
As well as burgeoning export demand for its flagship
stout brand
, Diageo claims that the site will also be used to produce its ale and lager brands, whilst maintaining craftsmanship ion the brewing process.
Closures and changes Diageo says that it had opted to close the plants at Kilkenny and Dundalk due to concerns over whether they could sustain meeting growing output demand for its products.
The company claims that it will also be streamlining operations at its Waterford brewery that will result in reduced output at the site, though does not expect any impacts on its Belfast-based packaging operations as a result.