DESNOES & GEDDES will be investing between $1.2 billion and $1.8 billion (20 to 30 million pounds sterling) over the next five years, the bulk of which will go towards upgrading production and packaging lines at the Kingston-based plant.
The plan calls for expenditure of up to some 12 million pounds sterling in the first half of the five years, and is built into the company's five-year strategy to improve sales of its top line products, improving cost effectiveness and preparing for competition in the market.
D&G's plans were outlined during an investors briefing at the company's plant at Spanish Town Road, Kingston last Friday.
Finance and business support director, Paul Soutter, noting that exports would be the key to improving the growth of their products, said they have had no price increase since November 1998 because of the focus on reducing their fixed cost base.
He said they were predicting about a six per cent reduction in costs by reducing the amount of overtime, even as they seek to inspire exceptional performance to achieve their goal of becoming "the world's coolest beer company".
Marketing manager, John O'Keeffe, noting that women were now playing a major role in alcohol consumption, said that since the launch of Red Stripe Light in August, this year, sales have been ahead of target and has been revised upwards.
Technical support manager, Godfrey Stewart, who spoke on the preparation for competition and D&G's investment plans, said improving cost effectiveness and reducing fixed costs would require improvement in the use of the company's assets, as well as improvement in reliability and capability of equipment.
D&G's chairman, Pat Rousseau, in the 2000 annual report to stockholders, said it was proposed that there would be significant investment in the packaging facilities which will help move the group towards "world class manufacturing" standards.
Mr. Stewart told the investors that the plan would involve the replacement or upgrading of its three production and packaging lines, as well as the installation of a multi-packaging equipment, even as they continue to improve the company's human resources.
Mr. Stewart said the company would also be establishing a "world class" environmental treatment plant which is expected to cost anywhere between one million and two million pounds sterling.
The chairman also alluded to the environmental plan, stating that "in accordance with the Montreal Protocol, we have been reducing the use of substances that deplete the ozone layer and to that end, we are eliminating the use of chloro-fluoro carbons (CFCs) in the plant," a programme on which they have been working with the Natural Resources Conservation Authority (NRCA).
