Guyana: Interview with Komar Samaroo

Komar Samaroo

CEO (Demerara Distillers LTD)

Komar Samaroo

After 20 consecutive years of operating under the previous regime and now that the government has recently changed, Guyana is undergoing a number of exciting transformations that will surely have a profound impact on the country’s future. The proposed changes certainly show promise for Guyana, but what do you think Guyana still needs to do in order to reach its full potential?  

Guyana´s economy is based on commodities like gold and bauxite in the mining sector and rice and sugar in the agriculture sector. We sell on the world market and depending on the prices of those commodities the economy fluctuates up or down. When the price of gold is very good, for instance, the economy does extremely well and when the price of gold goes down, the economy slows down. The economic base needs to be expanded and diversified away from commodities into more value added products so that it is not at the mercy of global commodity prices.

A currenty thought is that a country’s insecurity could hinder otherwise ensured foreign investments. Now that the Alliance for Change and A Partnership for National Unity jointly governs Guyana, what do you believe could be done to make Guyana’s policies and market more attractive to foreign investors?

The Government should identify areas in the economy where it would like to attract new investments and actively promote them through its embassies abroad. In addition, there needs to be clarity on any fiscal and other incentives it is offering for new investments. These should be transparent and open so that all investors know what are available to them. The time taken to process new applications and licenses should also be shortened.   

“I feel very privileged to have had the opportunity to climax my career with the company in the present position.”

DDL started in 1670 when a group of sugar cane producers formed an exporting co-operative of rum for sailors. How do you feel being the main decision-maker from such an institution when looking at its history?

The rum industry evolved out of the sugar industry. It was because of the growing European demand for sugar in the 17th century that people were brought to this country from Africa, Portugal, India and other places to produce sugar. The rum industry, therefore, has deep roots in the history of this country. Over the years I was part of a management team that consolidated rum production in one location in response to changing market circumstances. In addition, the company was modernized and diversified. More specifically, in the last two decades we have undertaken a major transformation of the company from commodity bulk rum to a branded rum business. It was a great honor for me to have experienced and participated in this dramatic evolution of a company engaged in a product with deep historical roots. I feel very privileged to have had the opportunity to climax my career with the company in the present position.

The distillery has the capacity to produce in excess of 26 M litres of pure alcohol annually, and is the largest supplier of bulk rums and alcohols from the Caribbean to brand owners in Europe and North America. How much is DDL exporting to these continents?

Historically our business was to supply bulk rum to brand owners in Europe and North America.  The company traded its products under various trade agreements that gave preferential market access but that changed in the 1990’s. In the process of evolving into the branded business, the company now sets aside a significant part of its production for aging to support its Brand development strategy. We still have several bulk rum customers some of whose brands are formulated using our style of rum and others who have long standing relationships with the company. But it is fair to say that the branded business has overtaken commodity bulk rum business.

Are you going to export other brands?

Yes, most definitely this is now our main focus. Our ELDORADO RUM brand is the main focus at this time. It is positioned at the premium and luxury end of the market with a portfolio of high quality aged rum blended to meet various taste profiles using rum produced from several of our heritage stills. Despite our modernization, we have retained some of the stills used on the individual estates for centuries and these produce quite unique styles of rum. We are also pursuing opportunities at the value end of the market where under our DIAMOND RESERVE brand we are developing a portfolio rum including of flavored rums to meet the growing demand from bar tenders for “well” products needed for a growing cocktails market.

How are you going to strengthen the relationship with the US?

We have been exporting our brand to the US for the last 20 years, but in the last 5 years we have grown considerably as more consumers have come to appreciate its quality. The US market is very complex, since each state is a different market with different regulations. Some states are controlled states with sale of liquor done through state stores, like Canada, while some are governed by franchised laws that do not allow for the ready termination of wholesalers who may not be performing. Given the three-tier structure of the alcohol market in the USA, we have to appoint wholesalers in each state and they control how well the brand does. At the present time, we are present in 30 states with varying degree of distribution. The USA is one of our key target markets at this point in time.

In 1992, DDL became the first rum producer in the world to market premium quality aged rum. What do your products offer that the other rums don’t?

Historically, rum was viewed as the poor man’s drink – you buy it when you cannot afford any other spirit. When we entered the branded rum market we went against that perception and created a high quality aged rum portfolio positioned alongside whiskey and other premium spirits. In order to achieve unique taste profile and smoothness we blended rums from the different stills that we retained from the different sugar states. Each product is a different blend and not the same product aged for longer. As I said earlier we have retained the traditional rum making technique. Hence, we still operate wooden pot stills and wooden coffee stills; the only of its kind in the world at the present time.

“As a relatively small player in a market that is dominated by large multinationals, we have to be ahead of the game.”

One of the DDLs skills is innovation. The company posses its own CO2 plant. As you might know, one of the characteristics of HBR is also innovation. In this context, what is the next big step for the company?

We have always been an innovative company over the years. As a relatively small player in a market that is dominated by large multinationals, we have to be ahead of the game. We make economic use of the waste streams from our production process, hence since the 1980’s we have been using the CO2 gas that comes from the fermentation process, after purifying it, in the production of Pepsi, Seven Up and other carbonated beverages. More recently, we started to use the waste that comes out from the distillery to produce methane gas that replaces a lot of the fossil fuel that we use in our boilers to generate steam. In effect what we do is try to gain a competitive edge by using production waste to create economic value. To reduce overall production cost. In addition, we continue to innovate in new products development. We have only just released in the market a limited edition series of rums that are subject to secondary aging in different styles of wine barrels.  

After the new policy implemented by Mr. Khemraj Ramjattan, Minister of Public Security, on reducing domestic violence by closing party locals at 2am, will the alcohol industry suffer any impact in its production and benefit?

Firstly, I must say that we advocate for the responsible consumption of alcohol, and never support excessive consumption or abuse of alcohol. Consumers and on-premise retailers will have to make the necessary adjustments in the light of the new government policy. Overall, I believe that whatever consumer spending is lost on reduced consumption, will be gained from “premium-ization” as consumer go for better quality.

All the Ministers we have interviewed recommended us to meet with you since DDL is one of the main exporters of Guyana. How is DDL contributing to Guyana’s economy?

We contribute in many ways. First of all, we pay a significant amount in taxes to the national coffers as I believe that we are probably one of the largest tax paying companies in the country. Secondly, we are earning foreign exchange as we export over 50 countries around the world and through our marketing efforts many people learn about the country through our brands. Thirdly, we provide quality jobs for Guyanese people. We invest significantly in the development of people, we give them career and job opportunities and we do have a very active program to train people continuously to prepare them for upward mobility in the company. We have a cadetship program through which we sponsor employees and other individuals to go to university while at the same time we employ new university graduates under our Management Trainee program every year. Many of our senior executive team members are persons who have benefited from these programs. Fourthly, we are one of the largest contributors to social causes in the country. Apart from sponsorships of various sports activities we also seek to impact on the lives of young people through the work of the DDL Foundation. The Foundation which was incorporated about six years ago and is managed by a board of volunteers, reaches out to top students in the country who are in the top five percentile of students in the secondary school entrance examination but who cannot afford the costs associated with attending the school assigned to them. The DDL Foundation provides funding and mentoring through volunteers from our staff members.

Are you engaged in any joint venture projects?

We are engaged in a joint venture in Jamaica where we partner with a very large Barbadian company and the government of Jamaica in National Rums of Jamaica, a large distillery which presently is in the bulk rum business but which has started recently to develop it own Jamaican brand of rum.

DDL is one of the largest companies in Guyana, and it’s well known specially for El Dorado Rum. However, Banks DIH is also positioning their brand in the market and it has recently been recognized by the US?

We are very focused on our business and we keep ourselves informed on the global trends so as to identify new opportunities whenever they arise. I think it is equally important for all other business entities in Guyana to go after opportunities that they see exist in any market. The objective must be to increase the footprint of Guyana’s products on the global market.

Last January, Dr. Persaud announced that he will not head the company anymore and you were the most indicated person to assume his position. What did this mean for you, coming from one of the most reputed businessmen in Guyana?

I am flattered that the board of directors of the company has the confidence in me to take over the top leadership position of the company from Dr. Yesu Persaud who provided excellent leadership in building a very strong foundation over the last three decades. I was privilege to have been a member of the team that worked with Dr. Persaud over those years. In my new role I am fully committed to continue to build DDL to be one of Guyana’s most successful business enterprise.

What are you most proud of in your life so far?

Of course I am very proud of my family, but I am also proud of the role I have played, albeit in a supportive one to Dr Persaud, in navigating the stormy waters over many years and overcoming numerous challenges to bring DDL to this point where it is recognised as one of Guyana’s leading companies.  The company has a clear plan on the way forward as it pursues it goals.

What comes next personally?

I think this is my last full time job. When I am finished I would need some time to catch up on many personal things that I haven’t been able to do while I have a demanding full time job. Thereafter I will find things to keep me intellectually active and use my many years of management experience on a part time basis in areas where I think I can make a difference.

As you know, HBR is the only magazine in the world considered as a training manual for company leaders and politicians. What advice would you give to someone that intends to invest in Guyana and wants to be successful?

I think every country is different in terms of history, laws, procedures and culture. Hence, any foreign investor should acquaint himself with these aspects of Guyana when they are seeking to invest. This is a third world environment and way things happen here will inevitably be different from a first world environment. You should come prepared to develop the human resources to meet your needs rather than assume that right skills will be readily available. But I will venture to say that with the right training Guyanese are about the best employees you can find anywhere.