Apr 10, 2017 News
Notwithstanding its complete withdrawal from the bulk rum market, Demerara Distillers Limited (DDL) has recorded an overall revenue increase of 0.5 percent or $89M in 2016.
According to Board Chairman of DDL Komal Samaroo, despite the company’s decision to withdraw from a market that was no longer profitable, the company re-aligned its business to meet the challenges of an increasingly harsh economic environment.
Addressing what contributed to the profitable year, Samaroo said increased international sale from branded products and high value rum fully compensated for the loss in sales from the bulk rum market. The revenue from those sales increased by 9.5 percent in 2016 compared to the previous year, while domestic revenue increased by 2.6 percent.
The company also recorded group profits of $1.8B, an increase of 16 percent or $296M as compared to the previous year. DDL’s overseas subsidiaries also performed favourably during the reporting year. The overseas aspect of the business raked in $189M in profit as compared with $172M recorded in 2015.
Explaining the need to exit that market, Samaroo said low prices combined with the decline in international value of the EURO currency were chief among the reasons for the cessation of business with countries that trade in the EURO.
The Chairman explained that the withdrawal resulted in a 43 percent decline in bulk rum export revenue in 2015; hence the company took a decision to completely withdraw from the market in 2016.
He said although DDL has withdrawn from that aspect of its export market, efforts were made to ensure that the company can re-enter if and when economic circumstances present profitable opportunities in the future.
Addressing the future of the beverage giant, the chairman said that the early presentation of the 2017 budget will ensure effective and improved business planning for 2017.
Samaroo said that although there are uncertainties with the global business environment and the increase in regulatory pressures locally; the beverage giant is well positioned to expand its global footprint. This will be done through its rum brands and its continued growth in this vital segment of its business.
Addressing the petro-carbon deposits that were found by Exxon Mobil, Samaroo said that his company will be taking advantage of this positive development. “The group will be expanding several of its businesses to take full advantage from the opportunities that may arise from this development”.
The story of rum in Guyana started in the 1640s with the introduction of sugar cane by the early European settlers. But it was not until distilling was introduced into the new territories by the British in the 1650’s that the foundation of Demerara rum production was laid down.
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