Demerara Distillers Limited (DDL) today announced that after much deliberation it had decided not to submit a bid for the Enmore Sugar Estate at this time.
The announcement by DDL comes after the Special Purpose Unit (SPU) of the National Industrial & Commercial Investments Limited (NICIL) yesterday announced that the tender for the sugar estates, under a process managed by PricewaterhouseCoopers (PwC), closed on October 31, 2018.
The DDL statement today said that there was an expectation that DDL would tender for the Enmore Estate, and in fact, DDL “invested considerable time and financial resources in a due diligence process” to determine the level of investment required to turn around the fortunes of the Enmore Estate.
“As a responsible corporate citizen, DDL was clearly interested in the preservation of the sugar industry in Guyana because it is deeply rooted in who we are as a nation and as a people.
“Moreover, the sugar industry is seen as inextricably linked to DDL’s rums, for which the value of participating in the industry’s survival is crucial to preserving those links.
“In fact, DDL’s interest in Enmore is driven primarily by its need for molasses for its core business as a distillery. The shortfall in molasses experienced after the closure of three GuySuCo estates severely impacted DDL’s ability to meet its commitments to local and export customers.
“However, in its due diligence exercise, DDL was unable to find a model for the Enmore Estate that would properly fit within its current investment and development strategy”, the company said.
In a comment earlier today, DDL Chairman, Komal Samaroo, said that “we respect the process being conducted by the SPU and PwC, and will continue to pay keen interest in those developments and outcomes.”
Samaroo added that, “if the estate is sold, we will quickly engage the new owners to ensure that we secure supplies of molasses for our distillery. Should the estate remain unsold, we would equally reengage to determine if there is a model that works for our shareholders.”
The DDL decision would be seen as a major setback for the planned privatisation of the sugar estates.