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Old 07-11-2008, 12:37 PM   #21
Stamina1914
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Actually, I believe that rum may be the fourth largest source of revenue. As here in Puerto Rico, I believe the USVI "Government" is the largest source of revenue.
Close. I wouldn’t classify the government as a source of revenue, but it is the largest employer on the islands.
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Old 07-11-2008, 12:53 PM   #22
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Welcome to the forums Caribgoodies. I appreciate your well written first post but am surprised that St Croix boasts the largest ethanol production facility in the world is just that.

Do you have any idea of the production? Nicaragua has a new ethanol plant that came on line in Jan that is one of the largest in the region.
http://www.virginislandsdailynews.co...me?id=17615534

The link does not go into specifics about whether or not this is the largest plant in the world, but it sure sounds impressive.
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Old 07-11-2008, 01:06 PM   #23
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Close. I wouldn’t classify the government as a source of revenue, but it is the largest employer on the islands.
When the US government pours billions of dollars into an island economy it has to be counted as a source of income if not revenue. Except for some taxes that money wasn't generated on the island.
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Old 07-11-2008, 01:11 PM   #24
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Default US Virgin Isles to issue bonds for rum distillery

Source: Ino
July 11th
The U.S. Virgin Islands has agreed to issue $165 million in bonds to help build a rum distillery.
The bonds will also help subsidize the cost of molasses used to produce bulk rum at the St. Croix facility that is expected to open in 2011.
Diageo PLC said the facility will supply all of the bulk rum used to make Captain Morgan branded products for the United States in 2012. The company is the world's largest alcoholic drinks producer.
The distillery expects to have a distilling capacity of up to 20 million proof gallons per year.
Legislators ratified the agreement late Wednesday after a two-day debate.


So it sounds like Diageo is getting consessions for their operating costs as well as help financing the distillery. After building a new more efficient distillery and getting subsidized raw materials maybe Diageo will implement waste recovery initiatives and lower their product prices.
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Old 07-11-2008, 02:36 PM   #25
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Here is a report from the The St. Croix Source giving more detail on the Diageo contract and hearings by the Senate that led to the ratification.
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Old 07-12-2008, 05:21 PM   #26
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I'm just surprised that Disney hasn't come out with a Jack Sparrow rum. Maybe there already is and I missed it.
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Old 07-12-2008, 05:57 PM   #27
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I'm just surprised that Disney hasn't come out with a Jack Sparrow rum. Maybe there already is and I missed it.
Wouldn't it have to be non-alcoholic to avoid attracting kids?
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Old 07-17-2008, 07:23 PM   #28
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Welcome to the forums Caribgoodies. I appreciate your well written first post but am surprised that St Croix boasts the largest ethanol production facility in the world is just that.

Do you have any idea of the production? Nicaragua has a new ethanol plant that came on line in Jan that is one of the largest in the region.
The facility is owned by GeoNet and has a production capacity of 100 million gallons a year. It is located on the site of the former Martin Marietta Aluminum plant on property leased from the Renaissance Group. The ethanol is distilled and dehydrated from Brazilian corn starch and supplied by Industrias Dedini de Base in Piracicaba, Brazil.

Oh, yeah...we also ferment beer.


On the Captain Morgan deal, it passed the Legislature 10-5. A promise was also elicited to purchase sugar cane from St. Croix farmers should they wish to start growing cane again. Additionally, the distillery is being built to accommodate 20 million proof gallons, more than twice the current U.S. Captain Morgan rum supply needs which are growing at 10% a year. The extra distilling capacity will enable Deagio to also venture into marketing new types of rum products to the United States in the future if they so desire.
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Old 07-17-2008, 07:44 PM   #29
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Quote:
Originally Posted by Edward Hamilton View Post
Source: Ino
July 11th
The U.S. Virgin Islands has agreed to issue $165 million in bonds to help build a rum distillery.
The bonds will also help subsidize the cost of molasses used to produce bulk rum at the St. Croix facility that is expected to open in 2011.
Diageo PLC said the facility will supply all of the bulk rum used to make Captain Morgan branded products for the United States in 2012. The company is the world's largest alcoholic drinks producer.
The distillery expects to have a distilling capacity of up to 20 million proof gallons per year.
Legislators ratified the agreement late Wednesday after a two-day debate.


So it sounds like Diageo is getting consessions for their operating costs as well as help financing the distillery. After building a new more efficient distillery and getting subsidized raw materials maybe Diageo will implement waste recovery initiatives and lower their product prices.
Ah, yah...the phrasing of your English is off. The Virgin Islands Government does not issue bonds. And the bond issue is to be $219 million with a hedge to $250 million. This is a cushion to cover cost increases and over runs. A common misconception during the hearings was that the Virgin Islands Government might in some way, be liable for the repayment of the bonds. Basically, by acting as a third party, the Virgin Islands with its excellent bond rating was able to get Deagio tax exempt bonding not commonly available to corporations. The liability to repay the bonds belongs to Deagio and its investors and not with the Virgin Islands Government.

I do challenge anyone to find me a private corporation or business that builds factories, distilleries or even sports stadiums without government subsidies r assistance. Heck, there isn't even a single gasoline refinery in the United States that does not receive heavy federal subsidies to keep gasoline prices as low as they are. (Yes...I said "as low as they are". Without those subsidies you would be paying close to $10 a gallon.)

So, were I you I would not expect rum prices to fall simply because of this deal. Captain Morgan already receives rum tax credits for the spirits distilled in Puerto Rico. The credits negotiated will not result in the price drop you are looking forward to. Worse, because of rising corn prices related to its use in ethanol, expect manufacturers of consumer foods to begin looking at cane sugar again as a sweetener. We all know what happens when demand for a commodity product increases.

The distillery, with modern automation and computerization will use almost 2/3rds less staff than the antiquated Puerto Rico facility, so there will be a savings in payroll costs. Whether or not that will be enough to cause a price drop in three years when the new distillery goes on-line will depend highly upon economic conditions in the world at that time.
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Old 07-18-2008, 01:52 AM   #30
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I'm just surprised that Disney hasn't come out with a Jack Sparrow rum. Maybe there already is and I missed it.
Or perhaps Disney came out with "Rally Monkey Rum", since they own the options on that name!

Given a choice between drinking Jack Sparrow or Rally Monkey, I'd take my chances with Rally Monkey!
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