Thinking Outside the Bottle

Rum company Angostura is going for straight shots. The Laventille-based company, which has stayed in the shadow of CL World Brands,  is now baring teeth of its own with the production of ethanol for the global markets. Executive Chairman of Angostura, Lawrence Duprey said he intends to satisfy the thirst for ethanol in the global market by investing in a fuel ethanol dehydration facility in Point Fortin. The plant,  which is expected to be opened in late September, will have an overall capacity of 100 million gallons per year, with the first phase being 50 million gallons. Analysts say it will boost Angostura’s bottom line and give the company that international flavour. “Angostura was buried in CL World Brands,” one analyst said, noting that the move into ethanol was strategically sound. The initial investment for the first phase will be US$11 million, and will include infrastructure and other design costs, that will facilitate the second phase expected in 2005.

He is not known for shying away from the global marketplace, and opportunities. The ethanol plant is just one advancement into the petro- chemical industry, he added.  Duprey is also the Chairman of CL World Brands,  a global company that has gobbled up international spirit  companies with known brands. Duprey,  Excecutive Chair-man of CL Financial, a powerhouse with energy (ammonia and methanol)  forming a huge part of its portfolio, said the construction of the Fuel Ethanol facility though is consistent with the broader objectives of becoming global. “It’s why Angostura,” he said,  “is seeking to diversify the bulk rum business into the  renewable fuel ethanol.” Trinidad has many added advantages for the construction of the Fuel Ethanol facility, explained Michael Carballo, Company Secretary at the company: “It is situated midway between major raw material sources (South America) and major markets. “Angostura opted to build the facility in Point Fortin because of  low energy costs, the convenience of a deep water harbour, an already skilled labour force and an already proven capability in world class alcohol production,” he added.

The company has done its homework. Energy-based co-mpanies are transforming, as “green fuel” implementation programmes are growing in demand worldwide, he said, noting that there has been a heavy growth in the US for fuel ethanol, due to new environmental and gasoline standards. MTBE, a component of gasoline, has far been a major health concern in the US. In 2003, California experienced major ground water contamination because of its toxicity. Fuel Ethanol, some say, will eventually replace gasoline as fuel, and it can be used as an oxygenating agent to improve octane. For the processing of the ethanol, the latest technology is being used. Molecular sieves will provide purity and are seen to be environmentally friendly. The process for the fuel ethanol is actually a natural follow up for Angostura and what it wants to  accomplish, said Carballo. “It is a downstream process from the alcohol business,” he said. “The main raw material being used is alcohol, there is a dehydration process which turns the alcohol into fuel ethanol.”

It is a good business fit, because, “we produce more than 50 million gallons of alcohol a year,” he said, noting that it was not that different from Angostura’ s alcohol industry. “We have the competitive advantage in terms of technology, skills and economies of scale. When this fuel is produced, it will be exported to the east and west coasts in the US, via the Caribbean Basin Initiative (CBI) route, where they will use it in their oxygenate markets,” he noted. “This is just the beginning, bigger companies are reshaping and soon CL World Brands, will be able to grab pieces of these companies,” said Duprey. Duprey said he is confident that Angostura will become global in spirits. “ We have marketing centres established all over the world. If you visit the UK or France, you are sure to find Angostura. Our Angostura 1919 premium rum is a global brand, and we expect to establish worldwide distribution in 150-200 markets,  said Duprey. Corballo said Angostura needed to find its niche in the global market. “We are doing very well and trying to become more globally competitive.”

In the years gone by, he said Angostura has always focused on dominating the local market and exporting its bulk commodity rum, which was  in keeping with its  Barcadi contract. His view is that the only way for Angostura to survive in the long run, is for the company to secure products in the overseas markets. “We have established investments in Scotch Whisky, Cognac, the Cruzan brand, Belvedere Vodka and other entities. This is all in the process of  achieving  global distribution,” said Carballo. “Although we are exporting, we are also acquiring overseas companies. This helps to generate export earnings in an indirect way and it returns to the company in dividends. So while we are exporting our key products overseas, what we are actually doing is acquiring overseas companies, and operating from there,” said Carballo.