-DDL records increased production,to contribute over $2.2B in VAT

THE Demerara Distillers Limited (DDL)’s distillery production for 2017 has surpassed projections with an increase of 30 per cent over 2016, a statement from the company said on Saturday.

As a result, the company envisages that its distillery production for 2018 will see an increase of a further 25 per cent, but has expressed much concern about developments in the sugar industry.
“These concerns are grounded in the long historical relationship between DDL and GuySuCo, in which DDL is dependent on the sugar estates for its molasses raw material, and in turn is a significant source of cash flow to GuySuCo for its operations,” the company said on Saturday.

DDL says that with the impending closure of the sugar estates, there will be a considerable shortfall in availability of molasses, which is directly related to the reduced projection of sugar production.

“In fact, based on production demand for local and international customers, DDL’s molasses requirement for 2018 is 70,000 tons,” DDL said, adding:
“In contrast, GuySuCo has set a sugar-production target of 115,000 tons at the three estates currently earmarked to remain in operation, with molasses production being pegged at 52,000 tons.”

In light of this shortfall, DDL said it has been actively exploring its potential role in the future of the sugarcane industry, and has executed a high-level technical and economic feasibility study on innovative approaches to use the existing sugar assets to meet the current and future needs for molasses for an expanding distilling industry.

“DDL therefore welcomes the comments from Minister of State Joseph Harmon at this week’s post-Cabinet press briefing, indicating that the Government of Guyana is still open to options that keep the GuySuCo estates operational until arrangements are finalised for them to be privatised.”

The company’s Chairman, Komal Samaroo, said “We are optimistic that the Government of Guyana understands what is at stake, not just for the sugarcane industry, but for all other stakeholders that are a part of the GuySuCo value chain, including the many thousands who are directly and indirectly involved in the production, distribution and sale of DDL’s value-added products, both locally and internationally.”

The company alluded to the position of President David Granger at the launch of DDL’s Special Edition 50th Anniversary El Dorado Rum in April 2016, when he said that the country’s rum is precious and must be protected and preserved in the face of peril.

“Workers’ jobs and the livelihood of those who indirectly depend on the industry are at stake. The loss of foreign exchange and excise earnings by the industry can result in severe problems in our economy. Guyana’s rums are an important economic sub-sector. It is in the national interest to ensure the survival and sustainability of this industry and the Government of Guyana is committed to supporting this industry,” President Granger was quoted as saying.

Meanwhile, DDL said given that the performance of the distilling industry in 2017 has been a bright spot for the local economy, building on the success of El Dorado “the imperative of finding compelling solutions to guarantee its future sustainability goes without saying.”

The company said it remains committed to playing an active role in forging “the next steps for survival” and has been engaging all stakeholders, including the Government of Guyana.
During a recent visit in October 2017 to DDL’s facilities by Prime Minister Moses Nagamootoo and Minister of Business Dominic Gaskin, the matter of molasses supply was raised. The prime minister had assured the company that molasses supply for DDL would be secure, DDL stated.

“Those who are saying that sugar is dead, or will be dead, should come and take a tour of DDL’s bond and factory; there is abundant need for molasses … so I don’t see today any sign of the death of the sugar industry. Guyana will continue producing sugar once there is a need for molasses,” the prime minister was quoted as saying.

Similarly, Minister Gaskin had commended DDL as “one of the biggest value-added companies in Guyana and probably Guyana’s most successful value-added company.” At the announcement of the company’s three-year $10B investment programme, Gaskin said his government “stands ready to give support to DDL wherever possible.”

“This support is crucial in recognition of the jobs to be created and the significant increase in taxes contributed to the national economy from greater earnings,” DDL said on Saturday.

In 2016, the DDL Group paid $1.9B in taxes, excluding VAT, and is projected to pay in excess of $2.2B for 2017 based on its performance.