– company’s methane gas plant already in operation
Dr Yesu Persaud
Chairman of the Board of Directors of the Demerara Distillers Limited, Dr Yesu Persaud, said on Friday, April 29 that, despite the unstable financial climate in the Caribbean, and the world by extension, investment in Guyana remained robust, as the construction, gold mining and manufacturing sectors grew.
While delivering the Chairman’s Report to shareholders and members of the DDL, Persaud added that there were still challenges facing the company in its remaining viable.
The company’s profit after taxation increased from Gy$1.033 billion in 2009 to Gy$1.140 billion in 2010. This is a 10 per cent increase from the previous year. Group turnover increased from Gy$12.4 billion in 2009 to Gy$13.7 billion in 2010.
However, viewed against the background of the challenging environment, the group’s performance was affected by the continuing increase in prices for raw materials and other inputs. The chairman added that the full costs of these increases were not passed on to customers, resulting in the company recording a reduction in gross margins on sales to those same customers.
Persaud added that the shortfall in these areas was thoroughly compensated by the significant increases in sales of export-branded bottled products in most markets.
The company recorded a 45 per cent increase in the volume of export sales for the year 2010, as compared to 2009. The company expected more sales, Persaud said, to match its branded products, but fierce competition on the international market resulted in the present profit margin.
Branded products recorded a 145 per cent growth over the previous year. The chairman said that the operation of the modern bottling plant assisted in capitalizing on growth opportunities. Innovative marketing activities on the international market were credited for the improved sales figure. 2010 was described as a successful year by Persaud. He pointed out that the deal with Sandals Resorts International to make El Dorado the exclusive rum at its luxury resorts, and the deal with an exclusive wholesale and distribution agent in the USA are just two of the company’s achievements for that year, along with the many awards internationally.
The company paid an interim dividend of Gy$0.12 per share, and the directors have recommended a final payment of Gy$0.33 per share, making the total for the year Gy$0.45, the same as in 2009.
DDL has eight subsidiaries, and among them are Demerara Shipping Company Limited, Distribution Services Limited, Tropical Orchard Products Company Limited (Topco), Demerara Contractors and Engineers Limited, and its international operations for Europe and North America — Breitenstein Holdings BV, Demerara Distillers USA, Demerara Distillers St Kitts and Nevis Limited, Demerara Rum Company Inc, and a joint venture Company — Demerara Distillers in Hyderabad. The company also has shares in several companies abroad, including in Jamaica.
Bio methane production
The increase of oil prices on the world market has adversely affected the operations of the Demerara Distillers Limited, and could continue to do so in the near future, the company’s chairman said.
DDL’s move to transform its operations from reliance on fossil fuel to an environmentally friendly green pathway is, however, projected to bridge this gap. The company’s bio-methane plant uses the by-products from the distillery to produce methane; and this, in turn, reduces the company’s dependency on fossil fuel, increases efficiency, and reduces energy consumption.
The bio-methane plant was installed several years ago when the company set upon a path that has transformed every aspect of its operations. The chairman said the plant is currently in the commissioning phase, with two of its three tanks in operation. He added that 30 per cent of DDL’s Bunker C fuel is being replaced with methane gas. The facility will be commissioned in June this year, and it is anticipated that 65 per cent of the Bunker C fuel will be replaced when the facility is fully functional in late 2011.
At the AGM, two employees — Mohamed Khan and Rupert Wilkinson – were each honoured for giving 40 years of service to DDL; while 22 others were honoured for serving the company for between 15 and 35 years respectively.
Persaud said the company was positioning itself to capitalize on the market opportunities despite the threats of the financial economy. “The diversified nature of the DDL Group is well prepared to buffer the anticipated shocks in any one area of our operations… I am confident that we posess what it takes to meet these challenges,” the chairman declared.
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