LAVENTILLE-BASED run and bitters producer, Angostura Holdings Ltd’s official commissioning of its new state-of-the-art wastewater treatment facility is likely to result in both the company and its Beetham fenceline community breathing easier.
For Angostura, the commissioning allows the company to ramp up its production of rum, which contributed 64.1 per cent of its 2019 revenue of $847.2 million, the company’s highest sales number in ten years.
In a statement issued on Monday, Angostura said: “As a result of the re-engineering works on the facility, daily distillery production was reduced by 68 per cent. The delay in completing the project also led to an increase in the cost of production for alcohol due to overhead costs and reduced output.”
In its 2019 annual report, Angostura said: “The company incurred an increased cost of production as a result of reduced capacity during wastewater treatment plant repairs. This position ensued because of the alternative means of dealing with the wastewater.”
The company added that its profitability ratios in that year were slightly lower than in 2018 “mainly due to the increased cost of production and operating expenses associated with repairs to the waste water treatment plant....gross profit margin of 49.3 per cent was slightly lower than prior year margin of 50 per cent and operating profit margin 22.7 per cent in 2019 compared to 22.8 per cent in the prior period.”
Asked how the new wastewater treatment facility would impact on Angostura’s production of rum, the company’s chairman, Terrence Bharath, told Express Business in an interview after the function: “Once the facility is up, it should increase the plant’s production. Once it is running, we should be able to go back to having the plant produce at capacity....The rate at which we can produce (rum) is directly linked to the rate at which the wastewater treatment plant can process.”
The wastewater treatment facility should take about one month to become fully operational, officials at the function said.
Angostura’s chief operating officer, Ian Forbes, said that by early to mid September the wastewater treatment plant should be operating at full capacity, as certain protocols have to be observed to facilitate a gradual increase in the plant’s capacity.
Financial analysts are projecting that an increase in rum production by Angostura will have a positive impact on the company profitability ratios.
In a June 30, 2020, JMMB Investments valuation report on Angostura Holdings Ltd, JMMB analyst David Paul, wrote that it is expected that when AHL has completed its wastewater treatment plant project, it would benefit from a reduction in its cost of goods and that this will lead to increased profitability for the company.
“We forecast that after the completion of the project, gross margins will increase to about 55 per cent.”
As a result of his projection for an increase in Angostura’s gross profit margin—as well as the possibility of higher local and international revenue, as a result of product innovation—Paul estimated that a fair value range for Angostura’s share price would be between $14.34 and $17.52, compared with its then market price of $14.90. The company traded at $15.30 on Monday.
Less stench for Beetham
Questioned on when he envisaged the problems faced by Angostura’s fenceline community, Beetham Gardens, would be in the past, Bharath, said: “They have not complained for a long while. I don’t think we have had vociferous complaints for some time....While this plant was being commissioned and fixed, we were carting away our sludge by reputable trucking companies. We never pumped any effluents into any drains or streams.”
He said the smell that Beetham residents complained of should also be reduced.
“One of the things we did is that we invested in technology to reduce or eliminate the odour. That’s a big feature of the project,” said Bharath.
In January 2017, residents of Beetham Gardens protested at the stench emanating from the Angostura compound as well as the liquids being discharged by the company into the drains of the community, which is located next to the Angostura compound in Laventille.
In response to the demonstration, Trinidad Distillers Ltd (TDL), a subsidiary of Angostura, issued a statement saying it was not discharging untreated effluent directly into Beetham’s municipal drains as alleged by protesters on Tuesday January 17, 2017.
“In keeping with the Environmental Management Authority (EMA) requirements, TDL constructed and now operates a wastewater treatment plant as per the guidelines stipulated in the certificate of environmental clearance (CEC – 3726/2012). The brown liquid discharged into the drains is the treated wastewater generated from TDL’s molasses based-distillery. It is biodegradable and non-toxic,” Angostura said.
“The company monitors the treated wastewater quality daily and results are sent to the EMA weekly. It cleans the municipal drain which passes through its compound quarterly. The main drain outside the facility, into which the waste water flows—the Mendez drain, appears to have structural issues which prevents the free flow of the waste water and often results in stagnation.
“The odour that the residents of Laventille are experiencing from time to time may be attributable to our wastewater treatment plant processing. The company is working diligently to reduce the odour. Regular meetings with residents of Laventille and Beetham are held to keep them informed of our progress.”
Delivering his address at the commissioning ceremony, Bharath explained that up to 2016, Angostura had asked WASA to process the company’s waste. He said it became difficult for WASA to continue processing Angostura’s waste because as the company’s rum production increased, its waste also increased.
“So in 2016, we embarked upon a project to install a wastewater treatment plant in Angostura. But we soon realised, after a while, that the wastewater treatment plant was not doing as best as it could. And therefore we had to embark upon some more works to the wastewater treatment system,” Bharath said. The Angostura board in 2017 gave a mandate to look at an improved wastewater system, he said.
As far back as September 2011, WASA had indicated to Angostura that it was the company’s responsibility to treat its own waste discharges, following the failure of the anaerobic digester berms at the Beetham Wastewater Treatment Plant.
In a Sunday Guardian article published on September 12, 2011, WASA’s then communications specialist Ellen Lewis said: “We met with Angostura Ltd two weeks ago and reaffirmed a prior established position that they are responsible for the management and treatment of the waste emitted from their plant in accordance with international best practices.
“The authority is in no way obligated in this matter. Angostura Ltd has a duty, therefore, to construct the appropriate treatment facility for any waste generated in its production process.”
Having decided in 2017 that the company needed to spend additional money on its wastewater system, the Angostura chairman said it took the company two years to get to the stage where it could start construction.
Bharath said: “Angostura has always led its mantra by understanding that it is not only a benefit to the company to sell its product, but Angostura owes an obligation to those around us and its environment. And you know our neighbours around here, we were always very particular about protecting the environment and protecting our neighbours.”