In search of new rum markets
Published:Sunday | December 19, 2010 | 12:00 AM
National Rums of Jamaica Limited has turned its focus on finding new markets overseas after a billion-dollar upgrade of its distillery at Monymusk sugar estate that boosted the plant's capacity by 40,000 litres to 18 million litres.
The upgraded state-of-the-art rum plant was commissioned Wednesday after a US$12.75 million (J$1.1 billion) of capital investment in new equipment and better processes.
Ownership in the distillery is split one-third each to the Jamaican Government, Demerara Distillers Limited of Guyana, and West Indies Rum Distillers Limited, a subsidiary of Goddard Enterprises Limited of Barbados
The plant is run by subsidiary Clarendon Distillers Limited, a company in which National Rums has a 73 per cent share, and Diageo NA Inc, 27 per cent.
"It is natural that with the additional capacity, we will now be seeking to enter into new markets," said Evon Brown, managing director of state-owned National Rums.
"This would not only increase our revenue, but also strengthen our operation base," he told Sunday Business.
National Rums, which also operates a facility in Trelawny, sells the bulk of its output to export markets. Diageo, up to last year, was its chief overseas buyer.
The upgrades to the rum plant were financed by equity of US$5.78 million from the three shareholders, National Rums, Demerara, and Goddard; US$1.29 million in combined revenue flows and bank loans; and US$5.67 million in grants from the European Union under the 'Integrated Development Programme for the Caribbean Rum Sector'.
Increase the yield
Clarendon Distillers has added a water-treatment plant; a weigh bridge/truck scale; waste water disposal system; a 5,500-gallon capacity copper pot still, which is expected to increase the yield of molasses produced from 195 metric tonnes to 230 tonnes; a Cleaver Brooks boiler, projected to need 3,000 litres of oil less per day; an electronic inventory management system; and a cooling system.
Brown says sales to Diageo, which last year represented 95 per cent of output, have fallen to 85 per cent as a result of new deals in parts of North America and Europe - five per cent of the rum is consumed locally - leaving room for the company to seek new buyers.
However, Brown would not comment on where the new market potential lies.
Prime Minister Bruce Golding, who commissioned the plant, hailed the project as a success of public-private partnership. The ceremony included European Union Ambassador Marco Mazzocchi Alemanni; Frank Ward, chairman of West Indies Rum and Spirits Producers Association; Rick Theilen, vice-president of procurement for Diageo Americas; and Yesu Persaud, chairman of Demerara Distillers Limited.