DDL’s investment disclosure

The disclosure yesterday that DDL is looking to invest $10 billion dollars in consolidation and expansion initiatives over the next three years is good news in more ways than one. It is good for a forward-looking company which, over time, has been giving much thought to where it is going in terms of growth and development. In an entirely different and no less important context it is good news for an economy in which clear signals of concern are coming, increasingly, from the business community, including the Business Support Organisations regarding what they consider to be a sluggish economy. As an extension of that problem there is also the looming issue of the fate of GuySuCo and more importantly the likely fallout in terms of job losses and all of its consequences.

As an aside one should add that the various businesspersons with whom this newspaper spoke during a visit to the Corentyne all came across as decidedly jittery about business beyond sugar… and they do not appear to see any silver lining at this time. In circumstances like these the news yesterday that Demerara Distillers Ltd (DDL) had developed an expansion programme that would cost the company $10 billion dollars over the next three years is news which, in the circumstances, can be described as more than a little heartening.

Here is a local company sending positive signals that it is determined to outlast the prevailing tough times, which it perceives as a temporary phenomenon. Here, one can make the argument that DDL is a subscriber to the view that tough times don’t last.

Significantly, DDL has set out with considerable clarity the context within which its future investments will take place, that is “in pursuance of DDL’s strategic goals to increase its export earnings [and], to diversify its income base; not only in alcohol but other things like food processing and other non-alcoholic beverages.”

Increases in export earnings and the diversification of income bases would appear to be high priority items amongst the strategic plans of private sector companies in the manufacturing sector and these objectives were the subject of discussion during the recent government/Guyana Manufacturing & Services Association (GMSA) round table last month. In the instance of DDL the announcement provides an unmistakable indication that in the midst of the economic challenges facing the country there are private sector entities that continue to seek to strategise their way towards improving their own circumstances.

To return momentarily to the recent first instalment of the public/private sector round table this newspaper noted particularly the seeming enthusiasm with which the GMSA emerged from the discourse. The point that should be made here is that assurances that government is similarly disposed as far as reaching some sort of modus vivendi with the GMSA (and the entire private sector, for that matter) would help to lift a bit more of the negative vibes coming from the private sector about the state of the economy.

Much of the negativity about the condition of the economy is deriving, understandably, from the circumstances of the sugar industry and what now, clearly, is an understandable fixation with the likely fallout from the closure of sugar estates. There is, too, a concern over the fact that there has been no reports coming from Go-Invest about any significant expatriate investments in the economy.

It is entirely reasonable to assume that there are other local businesses that are quietly but diligently seeking to weather the prevailing economic storm so that we must now allow for the current engagements between the GMSA and the government as a whole and the Guyana Revenue Authority, in particular, to mature. It is high time too that we hear from government with regard to its own contribution to the energizing of small businesses in the private sector. What, for example, is the situation with the 20 per cent contract allocation to small businesses provided for under the Small Business Act? And what about the outcomes so far of the grant allocations from the Small Business Bureau as far as the consolidation of small businesses is concerned? It is also worth enquiring about government’s intention with regard to some meaningful investment in inventory that can raise the bar as far as agro processing is concerned. Up until now, too, the government is yet to provide a public briefing on the high-level visit to Brazil by senior government officials which, according to what this newspaper was told, appeared to promise positive and relevant cooperation between Guyana and Brazil particularly in the realm of agriculture.

The point about all this is that DDL’s recent announcement goes far beyond simply disclosing what its investment plans are over the next three years. It sends a signal that private sector confidence in this country and in its capacity to move forward is still very much there. Setting its substantive announcement aside the company has gone as far as identifying some of the projects that will form the bedrock of its pursuits over the next three years. That, too, is encouraging and wholly deserving of a positive official response perhaps best tendered in the form of a serious, high-profile move to engage the private sector in a nuts and bolts engagement designed to expedite the critical issues (those have been mentioned in the media ad nauseam) that so evidently still represent a divide between the public and the private sector. DDL’s announcement may well work for us in more ways than one.

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