Caribbean Region: Review of Economic Growth and ... - USITC

covered in this report on average have higher per-capita incomes than the averagedeveloping country, these Caribbean countries appear to be less diversified than countrieswith similar per-capita incomes. There is considerable variation in export diversity amongthese Caribbean countries. Barbados is the most diverse, with a concentration index valueof 0.27, while Jamaica and the very small countries of Antigua and Barbuda and theNetherlands Antilles have the least diverse exports, with index values above 0.6. Trinidadand Tobago, while not concentrated according to the index value of 0.38, is not well35diversified outside of the energy sector. Guyana, with an index value of 0.32, is somewhatmore diverse than the Caribbean average. An example of industry and export diversificationin the case of Demerara Distillers of Guyana is provided in box 2.2.Box 2.2 Rum Industry in Guyana: Expanding Through VarietyDemerara Distillers (DDL), a diversified international company headquartered in Georgetown, Guyana, is a globalsupplier of premium and bulk rum, and one of Guyana’s and the region’s leading businesses. The company has itsroots in the 17th century when Guyana’s 200 sugar plantations each had small distilleries. Over the years, Guyana’srum production consolidated into a single large producer, DDL, which was incorporated in 1952. DDL’s core businessis its premium brand rum, El Dorado, which is widely marketed in the region and internationally. The company is alsothe largest supplier of bulk rum to North America and Europe. In addition, DDL is now a leading regional producerof carbonated beverages, fruit juices, and mineral water. Other company operations include distribution, warehousing,shipping, and seafood processing. DDL has subsidiary distribution companies in North America, Europe, theCaribbean, and India, as well as distribution arrangements in Asia.DDL’s success is based on the development of higher value-added products and the expansion of operations fromits primary rum business. Long a supplier of bulk rum to developed markets, DDL launched its premium andsuperpremium branded rum in 1993, which has steadily gained international market share and quality awards.Building on its expertise in spirits marketing, DDL entered into agreements to bottle and distribute international spiritsproducts such as Dekuypers liqueurs and Scotch whisky throughout the Caribbean. DDL also has expanded intononalcoholic beverages. The company manufactures and distributes PepsiCo products including Pepsi, MountainDew, Gatorade, and Tropicana brands for the Guyana market and for export to regional markets. DDL’s subsidiary,Demerara Services, Ltd., is a regional distributor for several multinational consumer products companies, includingJohnson & Johnson, Colgate Palmolive, and Nestlé products. Entering such agreements has enabled DDL to developand strengthen its production and marketing capabilities to international standards.DDL also assists Guyana fruit farmers, who are the primary suppliers to its subsidiary, Topco, a manufacturer ofpasteurized packaged fruit juice. To ensure a reliable supply of domestically produced fruit, DDL entered into anagreement with an international microfinance institution, Institute of Private Enterprise Development (IPED), in 2002,whereby IPED provided financing to Guyana fruit producers, primarily small-scale low-income farmers, to expand andshift production to meet Topco’s sourcing requirements. In exchange, Topco guaranteed a market for the increasedand diversified fruit production. Consequently, fruit output doubled by 2005, enabling Topco to expand production tobecome a leading regional supplier of packaged fruit juice.Sources: Demerara Distillers, Ltd. Annual Report, 2003 (latest available); Demerara Distillers, Ltd. company Web sitehttp://www.demrum.com (accessed March 4, 2008); Arthur Lok Jack, “Demerara Distillers, Ltd.,” Graduate School of Business,The University of the West Indies, Trinidad, Case Studies. 2005;“El Dorado Spirit Brands Are the Major Success Story of D.D.Land Guyana,” International Reports, Guyana, 2006. http://www.internationalreports.net.35Rojas-Suarez and Elias note that the energy sector in Trinidad and Tobago accounts for more than 80percent of exported goods (Rojas-Suarez and Elias, 2006). Trinidad and Tobago’s measured exportconcentration has risen in recent years, at least partly due to the large increase in energy prices relative toprices of other goods exported by Trinidad and Tobago, which has increased the value share of the energysector in their exports. The concentration index was 0.32 in 2001, when energy prices were considerablylower.2-19