June 25, 2008 — By 2011, if all goes well, a massive new Captain Morgan rum distillery on St. Croix will begin bringing in millions of dollars to the territory's coffers and create about 40 permanent jobs, said David Gosnell of alcoholic beverage titan Diageo at a press conference Wednesday in Christiansted.
Gosnell, Gov. John deJongh Jr. and Delegate Donna M. Christensen spoke and answered questions before a packed Government House ballroom about a "public-private initiative" between Diageo and the V.I. Government to bring the distillery to St. Croix. The move will profit and benefit the territory and the company, they believe.
"Upon completion of the distillery in 2011, we will have invested approximately $150 million in construction and relocation expenditures," said Gosnell, managing director of global supply procurement for Diageo. "We will have created no fewer than 40 full-time jobs, jobs that will require skilled labor — many of which we will find here locally in St. Croix. But this is bigger than jobs: This public-private initiative creates a significant engine of positive economic change for St. Croix."
The plant will be able to make up to 20 million gallons of rum annually, supplying every drop of Captain Morgan rum produced. The company will also sell some rum to other labels.
The St. Croix facility will take the place of Diageo operations in Puerto Rico.
"Any concerns as a fellow Caribbean territory about taking business and jobs from our neighbor Puerto Rico were set aside once we learned that they had already planned to leave at the end of their contract," Christensen said.
Added Gosnell, "We were attracted to the USVI by a very smart economic package."
The company will get Economic Development Commission tax benefits of some form, deJongh said when asked about the public share of the public-private partnership. The agreement also calls for either annual incentive payments or, alternately, an option to receive a grant to pay for the construction of the plant. Diageo would get the same molasses subsidy and market-support payment arrangement enjoyed by Cruzan Rum. In exchange, Diageo would develop, own and operate the plant, commit to making all of its Captain Morgan rum at the plant for at least 30 years, and be liable for damages if it breached the agreement.
Rum excise taxes collected by the federal government and remitted to the territory are the principal way the distillery will benefit the territory.
The territory's coffers would get at least $100 million over the 30-year span of the agreement, and possibly more, deJongh said.
Several potential sites have been examined, but none selected as of yet, he said.
Asked about the potential environmental impact of the distillery, Gosnell said his company takes great care to be a good corporate citizen and to be gentle to the environment.
"In our plant in Uganda, for example, I am glad to tell you the water we put back into Lake Victoria is superior in quality to the water we take out," he said. "And we are very proud of that."
Captain Morgan is the number two rum in the world, with sales of more than 7.5 million cases a year. Diageo, headquartered in the UK, owns Guinness, Johnny Walker, J & B, Smirnoff's, Tanqueray and Jose Cuervo in addition to Captain Morgan.
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