DDL uncorks $4.5B expansion

Demerara Distillers Limited (DDL) yesterday unveiled a $4.5B expansion programme which includes investment in a new bottling plant, a new multi-column still and, the first bio-methanization plant in the English-speaking Caribbean.

In revealing the new investments at a press conference held at the company’s Diamond, East Bank Demerara location yesterday, Chairman of DDL, Yesu Persaud noted that the growing demand for the company’s products spurred the ventures. Asserting that his company, which is holding its Annual General Meeting today, had successful products in the global economy, he stated that in the global market, one has to produce the best.

From left are Bert Carter, Komal Samaroo, Yesu Persaud, Loris Nathoo, Bal Parsaud and Alex Graham at yesterday’s press conference.The foundation works on the bottling plant, have already been completed with construction of the structure slated to begin shortly and by early next year, it would be in operation. The modernized and fully automated plant, with a cost of $1.8B would see a doubling in bottling capacity of the company to cater for the projected increased demand of DDL’s El Dorado branded products in the local and international markets. Persaud declared that the plant would be very flexible and enable a high quality of bottling, which he noted, is of “paramount importance in the international market”. He revealed that with the plant, the company would have the capacity to do bottling for others and in this regard, they had already been approached. Additionally, a reservoir is to be set up next to the plant.

Meantime, DDL is also investing in a bio-methanization plant, which Persaud described as a totally new concept in Guyana. Pointing to the cost of fuel and noting that the distillery consumes a great quantity, he said that the company was looking for savings. The use of the $1.1B plant would see 60-70% savings of the fuel currently used by the distillery operations. The plant will utilize the spent “wash” from the distillery to produce bio-gas. “This is a major, major project”, Persaud said noting that it would put the company ahead in the region. He said too that with the worldwide attention given to the environment, the use of the plant would see more environmentally friendly operations. It was revealed that the group’s current fuel bill as a whole is $1.4B.

In train also, is a new five-column still to be set up at a cost of $1.1B. The still will give the company additional capacity and flexibility in producing a wider range of products. There is $500M for other projects.

Meantime, DDL’s Vice-President for Marketing Komal Samaroo noting that the company is in the international market and competing against mega-brands said that they had been working in several markets over the past few years and have had significant successes. He stated that in the spirits market, a process of `premiumisation’ is occurring and one of the key processes was the upgrading of the packaging and the company’s products had undergone several such upgrades. He revealed that this year, for the tenth year in a row, the El Dorado 15 Year Old rum won the gold medal at the International Wine and Spirit Competition.

Loris Nathoo, another company official, in giving a general financial review of the company within the last five years, noted that turnover increased to almost $12B for the group within that period. He noted that the group’s total assets were $17.6B at the end of 2007 and shareholders funds were almost $10B. He said that the return on shareholders funds averaged 16% over the last five years. Nathoo said that over that period almost $9B was generated from operations and over the same period $4.2B was used in investing activities while $1.3B in dividends were paid over during that period and $2.5B in corporation and property taxes.  He further said that with the bio-methanization plant, the fuel cost as well as the company’s carbon footprint will be reduced, giving it an additional advantage.

Meantime, Persaud noted that the company had “breached” another “major hurdle” on the marketing side and DDL is now in Russia. He said that Russia is a huge market with lots of spending power and it was not easy to enter this market.  With regards to man-power, Bal Parsaud, Director of Human Resources said that while this is challenging, the company has an ambitious plan to train its employees.

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