June 26, 2014
A Freeport brewery has committed to undertaking a $20 million, 15-year expansion if the government will enter into a heads of agreement with it that will provide it with "longer term" stability in its business environment.
The Bahamian Brewery and Beverage Co. (BBBC), which yesterday signed a $2 million contract with Frecon Construction Ltd. to expand its storage and production facilities, has already drawn up plans for a special facility to accommodate tours at the site and has more investments in the pipeline.
"We are in talks with the government to establish a longer term commitment. I need that commitment to grow this company. Our competitor (Commonwealth Brewery) had 20 years (of tax advantage) as a foreign company and here I am as a Bahamian who would hope to receive the equal opportunity. So far I must say the government has been most understanding," said Jimmy Sands, president of the company.
The decision to relaunch the expansion of the BBBC's storage and production facilities comes after Sands shelved the project in August 2013, after being warned by the government that it intended to increase the duty the company pays per gallon of beer produced, a move which would have slashed the company's tax advantage and threatened its survival, claimed Sands at the time.
That tax increase did not ultimately take place, said Sands yesterday, and the brewery was further reassured when it received no mention in the 2014/2015 budget communication.
The beer executive, whose company produces Sands, High Rock, Strong Back and Bush Crack, said that further expansion beyond yesterday's $2 million commitment will require the government to sign a heads of agreement with the company.
"We've presented that to the government. They are in receipt of that, but we haven't gone any further than that. We want to know what kind of business environment we'd be working in. At the end of the day, one has to know what to expect tomorrow to run this company; you can't run it when the rules are changing day to day," he said.
Among the plans which the BBBC has in the short term is the construction of a new facility to better accommodate tours of the company launched last year.
"We've been doing very well with them. We receive probably about 100 to 150 people a day. Right now we want to put up a facility adjacent to us, where we own the property, and that would be another major investment. All of the drawings have been drawn and approved, all that is in place. All I have to do is push the button. It would be at least another $1 million (investment)," said Sands.
Asked about how he views the potential impact of value-added tax (VAT), set to come into effect in January 2015, the executive said: "It's not going to help us but at the same time the country needs money. Whether it's VAT or income tax, they need money. We're all in the same boat together. Don't ask me what's the right thing to do, but I think with all the dialogue that has taken place it's very good. I think the business sector and the government has been most cooperative in trying to reach an amicable solution."
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