DDL earns $1.6B taxed profit in 2021 – mid-year report

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…Demerara Rum brand to get protected status in Europe – Chairman

Chairman of DDL, Komal Samaroo.

Despite the fallout from the ongoing COVID-19 pandemic and the recent devastating floods across Guyana, the Demerara Distillers Limited (DDL) Group has registered $1.675 billion in profit after tax during the first half of 2021.

This represents a 21 per cent increase from the $1.380 billion recorded in the corresponding period last year. Similarly, the profit before tax for January to June 2021 grew by 20 per cent from $1.948 billion to $2.340 billion.

According to DDL Chairman, Komal Samaroo, “In Guyana, quite apart from the effects of the COVID-19 pandemic, there was also unprecedented flooding in most administrative regions of the country, which adversely affected supply of certain fruits as well as local sales across several Divisions of the Group.”

Notwithstanding these challenges experienced in the first half of 2021, the Group saw a turnover of $12.24 billion compared to $11.19 billion in the preceding year. This represented an increase of $1.05 billion or 9.4 per cent increase compared to turnover for the same period in 2020.

During the six months period, work on the implementation of the Topco Fruit as well as Dairy Processing and Packaging Project continued. The Juice Processing and Packaging Line was commissioned in the period and the 1-litre packaged Topco juices were introduced on the market in February 2021, while the Fruit Processing Line was successfully commissioned in May 2021.

However, the Dairy Processing Plant is now expected to be commissioned in August 2021. Further, in this period, the Group commenced work on a project to re-locate the Bulk Terminal Operations from Water and Schumaker Streets to Diamond in order to more efficiently facilitate the change of logistics arrangement for the export of bulk products to customers.

This project is expected to be completed by the end of this year. These projects were the main elements in capital expenditure of $1.029 billion incurred during the six-month period.

Protected status

Meanwhile, Samaroo also announced in his mid-year report that during this period, significant progress was made to protect the Demerara Rum Geographical Indication (GI) in the European Union (EU).

Geographical indications are words that identify a product originating from a particular place. The EU Geographical Indications system protects the names of products that originate from specific regions and have specific qualities or enjoy a reputation linked to the production territory.

According to the DDL Chairman, the Demerara Rum GI application was officially published on April 8, 2021, and upon the expiration of the three-month period for any opposition, it has now progressed within the European Commission to be translated into the various languages of EU countries.

Following publication of the Demerara Rum Technical Specifications in the EU Official Journal, in the coming months, Demerara Rum will be added to the list of protected GIs in the EU.

He further outlined that the EU registration of the Demerara Rum GI will be Guyana’s first GI registration in the EU, as well as the first Caribbean rum GI registration in the EU.

Nevertheless, Samaroo said in his 2021 report that during this reporting period, countries around the world made significant progress in getting the COVID-19 pandemic under control through the implementation of widespread vaccination programmes. However, new variants of the virus continue to pose a serious challenge.

He noted that this, as well as, misinformation about vaccines and the unavailability of vaccine supplies in third world countries have resulted in surges of infection in various parts of the world.

Several countries commenced the re-opening of their economies in a phased way, resulting in the gradual reopening of the tourism and hospitality sectors, which were severely affected by the pandemic. Consequently, supply chains into key markets were re-opening and had positive impact on sales in the period.

Nevertheless, the DDL Chairman posited that during the second half of 2021, it is anticipated that several new projects would commence, as the Group seeks to preserve competitiveness in an increasingly competitive market; while continuously diversifying the business.

Samaroo also took the opportunity to commend staff of the DDL Group, who have risen beyond the normal call of duty and responded positively to the many challenges in the period.