(Jamaica Observer) Red Stripe sold its minority stakes in two breweries located in the Caribbean for US$9.3 million ($982 million).
The local brewer offloaded its five per cent stake in Brasserie Nationale d’Haiti and its 10 per cent shareholding in Windward & Leeward, St Lucia to Heineken last Thursday.
The proceeds from the sale will free up cash for the company, which is in the implementation stage of some major capital investments.
“This is the right time to dispose of these minority shareholdings as we have ambitious plans for Red Stripe with several major initiatives being undertaken,” said Cedric Blair, Red Stripe’s managing director. “These include the installation of our co-generation plant, plant optimisation and Project Grow — the conversion to the use of locally sourced raw materials.”
Red Stripe has invested US$7 million in the plant, which uses the heat created from generating electricity to produce steam. It plans to use liquefied petroleum gas (LPG) to fire its dual fuel engine that will arrive in January until liquefied natural gas (LNG) becomes available in Jamaica.
Utilisation of waste heat for steam production also reduces the requirement for cooling water supplies for power generation and eliminates the need for structures such as the cooling towers that dominate the skyline in a conventional power plant.
The expected completion date for the co-generation plant is March 2014 and the company expects to reduce their energy costs by approximately 40 per cent through this initiative.
The local brewer also expects to complete three pilot brews for its cassava beer by the end of this year and aims to grow raw materials locally, with an aim to replace 70 per cent of imported inputs by 2020.
Following the testing, the company will begin its pilot planting in early 2014, and is to sign a lease agreement for a plot of land in Bernard Lodge in two months.
Blair expects that his company will begin to produce cassava beer by September.
“We are focusing on growing the Red Stripe business locally and internationally,” said Blair in a press statement issued last week.
“The sale of the minority shareholdings was timely and facilitates greater focus on growing this iconic Jamaican brand” added Richard Byles, chairman of the Desnoes & Geddes Board.
The two Caribbean-based breweries that have been sold will continue to brew Guinness under licence for Diageo, in addition to the other licensed breweries in Guyana, Trinidad, the Bahamas, St Vincent, Belize, Grenada, St Kitts, Barbados, Panama, Dominica and Antigua.
