Diageo is to invest £520m in a new brewery on the outskirts of Dublin and an upgrade of its existing St James’s Gate brewery, it was announced today. But the company also said it would be closing its breweries in Kilkenny and Dundalk and streamlining operations at its Waterford Brewery with the loss of 250 jobs. The announcement follows a comprehensive 12-month review of its brewing operations in Ireland. Speculation had been rife that it would sell the St James’s Gate brewery for redevelopment. But today Diageo revealed the St James’s Gate brewery will be upgraded and consolidated to produce Guinness primarily for the Irish and British markets and will be the second largest brewery in Ireland when complete. The new brewery will be completed by 2013 and will be Diageo’s largest brewery and the largest in Ireland. Full details of the proposed site are to be announced at a later date. Surplus land at St James’s Gate Brewery, Dundalk and Kilkenny will be sold for redevelopment and has an estimated value of £400m. Diageo chief executive Paul Walsh said: “This will be the single biggest capital investment made by Diageo in its supply infrastructure since the company’s creation 10 years ago and will enhance the cost competitiveness of our global beer operations. ”It represents a major vote of confidence in our beer business and in Ireland as a global brewing centre of excellence for our company. “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. “Our ambition is to create a brewing hub, which will meet the highest standards of technology, efficiency and environmental management." And he added: “It will marry 21st century solutions to our 300 years of brewing tradition, craft and heritage in what I believe will be a winning combination.”