The five-year investment plan will include £500 million to build a major new malt whisky distillery, expansion of several existing distilleries and “substantial” warehousing expansion to store maturing spirit to meet growing global demand for its brands, led by Johnnie Walker.
The remaining £500 million will be committed as working capital for maturing spirit to be laid down between now and 2017.
Detailed plans are also being drawn up for a second new distillery, which will be built if global demand for Scotch meets Diageo forecasts.
The investment will create 250 construction jobs for each of the five years and an estimated 500 further jobs from the knock-on effects on the Scottish economy.
Diageo also said it would take on around 100 apprentices and graduate trainees over the investment period.
Walsh, Diageo’s group chief executive, said: “Our investment will generate significant numbers of new Diageo jobs, as well as boosting the local construction sector and stimulating job creation throughout the Scottish economy.”
Scotch represented 23% of Diageo’s production volume over the past five years and its Scotch brand sales grew 50% in that time with sales now approaching £3 billion annually.
Whisky contributed a third of Diageo’s gross profits in its last full financial year.
In 2009, more than 20,000 people took to the streets in protest when Diageo axed 900 jobs at the height of the global financial crisis, including the closure of the Port Dundas distillery and a packaging plant in Kilmarnock.
The £40 million Roseisle distillery in Speyside was opened by Diageo in 2010, the first new-build, large-scale malt whisky plant to open in some 30 years.