DDL’s New Chairman discusses the

bitter politics of the Sugar Industry and

the AML debacle

By Kiana Wilburg
Mr. Komal Samaroo, a happily married father of four has been having a long and satisfying affair. It is one with the beverage and rum producing giant –Demerara Distillers Limited (DDL).
Samaroo has served the company as Managing Director for 30 years and working behind the scene on the

Komal Samaroo, Chairman of the Demerara Distillers Limited

international market has given him the scope to develop his own concoction for success. It is a trade he shares a wonderful relationship with. And his undying love and loyalty to the industry and his job has earned him the position as the New Chairman of DDL which was held by 85-year-old, international business guru, Dr. Yesu Persaud for more than 35 years. The connoisseur of great rums had expressed that whilst Samaroo may not be the most conspicuous member of the company, his contribution is most certainly invaluable.
What is particularly special about Samaroo is his ability to make a Guyanese product one of the leading brands in the foreign markets.
The rum industry essentially depends on molasses and as Guyana witnesses the grappling decline of the ailing sugar industry, Samaroo has taken the necessary precautions and has brought to the table his own contingency plan.
In an exclusive interview with this publication, we learn about the man now holding the mantle given to him by Dr. Persaud. As he prepares to pilot new strategies and plans for greater development, he discloses his concerns about the possible effects of Guyana’s blacklisting status on their international markets as well as his take on the sugar industry.

Education
Samaroo said he was naturally attracted to the science field as a student of Cummings Lodge Secondary. But after graduating, he realized that the business field was the only avenue at the time that allowed him to work and further his career in the evenings.
“When I got out of school, I got a job in business. I joined the Bookers Rum Company in 1969. I worked in the day and studied in evenings for the Institute of Chartered Secretaries Exams and then I did the accountancy exams; the Chartered Association of Certified Accountants which I completed in 1977. While I was doing that, I was working. I started in the bottling plant and then moved to the accounting department a year and a half afterwards. After moving through several positions I became Group Chief Accountant in 1977, Finance Director in 1979 and Managing Director in 1984. As Managing Director, I was responsible for developing corporate strategies.”
“Bookers Rum Company really evolved out of the need for bulk rum by companies in the United Kingdom (UK) and Europe and they were bottling it under their own label while we were basically producing, putting it in barrels and shipping it to them. However, we were trading under what was called the LomÉ Convention which was a trade arrangement which allowed African, Caribbean and Pacific (ACP) countries to have duty free access to the European Market. But by the time I became director, it was clear that those arrangements were not going to last. The world was moving towards global free trade and these preferential trade agreements were coming to an end.”

Managing family life & Business
“Managing family life and business is very challenging,” expressed the Chairman. He added, “Dealing with a job that requires you to be travelling and a family that requires your attention is difficult and I think it is important to get the family on board and to get them to understand that while there are competing interests, they need to share in your goals.”
Moreover, “In the mid 1970’s, the nationalization of Bookers was announced and that was a bit disheartening for me at first because my career was at the initial stage of take off with this company.” However, that period was filled with uncertainty and by that time, Persaud was announced Chairman of DDL and he brought a very definite business perspective

The Eldorado Rums

which I thought provided opportunities for me. Eventually when I got on board I was given the opportunity to go to the United Kingdom and complete the final part of my exam in 1977 and when I returned I was appointed the Group Chief Accountant and then Group Finance Director in 1979.  With those roles I was given the scope to help chart the course for the company and that gave me a lot of satisfaction. I was instrumental in preparing feasibility studies for a number of major projects and so I would say that I derived much professional satisfaction as it relates to helping in creating what the company is today.”

The North American Market
Taking a Guyanese product and making it the most popular in a foreign market is no easy feat. “When we developed our brands we tried to market it through agents and distributors in North America in the 90’s and there was slow progress. From 2003 to 2004, we strategized and we found that if we don’t physically go to the market and champion this cause, then our progress would not be in keeping with our expectations. In 2004 the company agreed to really give the Canadian market a big push and I agreed to lead the process. Each of the ten Provinces is a separate market, each with its own Provincial Liquor Control Board with the exclusive right to import and distribute liquor.”
“In Ontario, there is the Liquor Control Board of Ontario (LCBO) which is the largest importer and distributor of rum in Canada. At the time we had one listing of the Eldorado rum with the board and when I walked into the store I noticed that we had one bottle on the bottom shelf. In those markets you have to operate through agents who are licensed by the liquor boards. I got a meeting with the agent and questioned our position in the shop. After they made the necessary inquiries they said we are classified as an “ethnic group product” brought in to supply Caribbean communities in the Province.”
Naturally, he challenged that classification. He then put before them strong arguments on the basis that it is a brand that is wanted by all sectors. He insisted that the sales be reviewed to support his contention and they undertook the task of doing just that. But the findings proved that Samaroo was right. The rum was then reclassified as a “Premium Amber Rum.”
“That made us eligible to get to the third shelf and that was our first victory in 2005. The next goal was to move from one product being listed by the board so we requested a listing for the Eldorado 12 year old retailing at $36 a bottle. They then said in the rum category they would not give a listing to rum that is selling over $30 dollars because it would not sell and I told them they did not give El Dorado Rum the opportunity before coming to that conclusion.”
Once again, “We succeeded and got a listing on a trial basis. They created a new market segment called the ‘Deluxe Amber Rum’ for rums retailing at over $30 a bottle. We now have the 12, 15 and 21-year-old listed in that category and our brand is the leader in that category leader in that market segment.”
“We then looked at expanding into other Provinces using the successes of Ontario as a case model to get the attention of the boards in the other provinces. Presently we are in all the provinces and we are continuously improving our presence. Just recently we have applied for the listing of the 8-year- old El Dorado Rum.
The United States Market is much different. Samaroo explained that this market has a three tier structure; The Importer, the Wholesaler and the Retailer.
“We tried to initially find an importer but we couldn’t get one that was interested in the El Dorado rums and it was difficult for us at first. However, we decided to establish our own company and succeeded in getting it licensed as an importer of spirits by the US authorities and that gave us entry into the first tier of the distribution chain. We then had to contract wholesalers on a state by state basis to take the rums to the retailers and we are currently in 25 states and this year we will be putting even more emphasis on expanding in the US markets.”
“We are now selling Eldorado in over 50 markets globally. We have a good presence in countries such as Italy and Denmark which is managed by our subsidiary in the Netherlands whilst we manage the UK market directly from Guyana.”

Bitter Politics of Sugar
The Guyana Sugar Corporation (GuySuCo) has been plagued for some time by poor management which among other factors has led to the decline in its production. Many members of the political opposition are of the view that the ailing state owned company will not be able to honour its arrangement with its largest customer- Europe and thus may lose the preferential market if its New Year plan does not induce an increase in production.
However, Samaroo has his own contingency plan adding that he does believe that the company should review some of its policies. “First of all for a successful business you need to be clear on your mission and goals and get the people with the skills, knowledge and attitude to buy in on the mission to achieve clearly defined business goals. At the center of the business it is the people who are involved and if you do not give those people clarity and scope within which to do the job while at the same time exercising control and direction, you will never really achieve anything. While I do not know the details of GuySuCo’s organization and internal arrangement I strongly believe that if the principles are followed as they design their new business plan it will provide them a path to growth again. “
“To build a substantial business you need efficient organization with clarity of purpose and understanding of your markets. You may have guarantee markets today but there is no guarantee it will be there tomorrow. I believe a company must evolve from its dependence on guarantee markets and while it will take some time to do so, there is really not an option in the long run.”
“If the sugar company is not able to fulfill the requirements of DDL, then we know where to go. With every business there must be a contingency plan. Molasses is a globally traded commodity and we would like to get it from our local producers but if for whatever reason that cannot happen then we would have to outsource molasses and import it for production. Because there is logistics involved with the transportation, handling and storage it might affect sales but we would know what adjustments to make.”
Guyana and the blacklisting status
As it relates to the heated debate over the effects of the Anti Money Laundering and Countering the Financing of Terrorism Bill, Samaroo said, “It has not affected us up to this point in time but as a company that engages in international trade it is a matter of serious concern for us and we hope that all the persons who have to address this issue would understand the serious implications since it can affect our cash flow and relationship with customers. Forty percent of our revenue is from the international market. We have not seen any signs of danger and we have not encountered any difficulties last year.”