Carew shines on distillery profit

The distillery unit has long been a money spinner for the state-owned Carew and Company (Bangladesh) Ltd. But due to massive losses in other units, the sugar mill located in Chuadanga'sDarshana had been incurring losses year after year.

It took 80 years for the company to post profit for the first time in its life span as it's profit from the distillery unit outstripped the consolidated losses counted by other units in the 2017-2018 fiscal year. And since then, the company has kept posting profit every year riding on ever increasing revenue earned from the sales of liquor. 

In FY21, Carew and Company earned Tk195 crore in revenue only from liquor, which was Tk38.39 crore more compared to the previous year. Increased sales of hand sanitiser and vinegar contributed to the company's profit in the pandemic year. 

However, due to large losses in the company's other units, mainly sugar, its consolidated profit at the end of the year was Tk29.18 crore, which is about Tk20 crore more than in the previous year.

The company's sugar unit has incurred losses of around Tk70 crore. Not producing sugar as per target and selling sugar at a low price despite the high production cost has caused the loss.

The Bangladesh Sugar and Food Industries Corporation (BSFIC) runs 16 companies, including 15 sugar mills and one engineering company named Renwick Jajneswar and Co.

Last year, the government suspended production at six sugar mills, while nine are still in production. All the running sugar mills are counting losses.

Carew and Co is the only government company in Bangladesh that manufactures and sells liquor. However, some other companies sell imported liquor in the country.

According to people concerned, the company has been unable to balance spending with revenue due to rampant mismanagement and corruption.

On the other hand, due to the high demand and quality of alcohol, revenue from the distillery department of the company has been increasing every year.

Sadikur Rahman, deputy manager (production) of BSFIC, told The Business Standard, "Only the distillery unit of the company makes profits. The main product, sugar, is suffering huge losses due to various reasons."

He said, "Alcohol produced by Carew is sold only domestically. We do not export it. These liquors produced in the country are of the same quality as many foreign brands, which is why demand is increasing."

Four years of profit in 83 years

Carew and Co has made profits only four times so far in its 83-year timespan. It profited for the first time in FY2017-18. It also profited in the next three consecutive years.

In FY2020-21, it made a profit of Tk29.18 crore from distilleries, hand sanitiser, vinegar and organic fertiliser factories. However, in this period it counted a loss of about Tk76 crore in sugar.

That year, the company's income from organic fertiliser factory was Tk25 lakh, Tk1.5 crore from hand sanitiser and Tk32.88 lakh from vinegar.

In 2019-20 FY, Carew and Co made a profit of Tk9.33 crore, up from Tk8.21 crore in FY2018-19.

Carew's alcohol brands

The company produces alcohol and different kinds of spirits from the molasses of sugarcane juice which are by-products of sugar production.

Three by-products are found after extracting sugarcane juice for sugar production, including molasses, bagasse and press mud. Different products are made from these three by-products.

Molasses is the main ingredient in liquor or alcohol production. Alcohol is made after processing yeast with molasses.

The distillery unit of Carew and Company manufactures country spirit, rectified spirit (original), rectified spirit (homeo), denatured spirit, absolute alcohol and liquor.

Among these, the company makes the most profit from liquor. The company produces nine brands of liquor, including Yellow Level Malted Whiskey, Gold Ribbon Gin, Fine Brandy, Cherry Brandy, Imperial Whiskey, Orange Curaçao, Tsarina Vodka, Rosa Rum and Old Rum.

In FY2020-21, the distillery department of the company produced 52.47 lakh proof litres of liquor. It marketed 46.96 lakh proof litres of liquor.

The company produced 28.88 lakh proof litres of country spirit, 10.88 lakh litres of foreign liquor, rectified spirit 88.10 thousand proof litres, denatured spirit 6.91 lakh proof litres and alcohol 2.48 thousand proof litres.

It sold a record amount of 1.16 lakh cases of bottled foreign quality liquor in FY2020-21. The company started production of hand sanitisers during the Covid-19 period as demand for this product increased. During this financial year, it marketed 21,000 litres of hand sanitisers worth Tk1.5 crore.

MdGias Uddin, general manager (agriculture) and acting director of Carew and Company,   said, "The company is now making profit. It has been possible through the joint efforts of everyone involved with the company. We have undertaken different plans to transform it into a fully profitable company. If the mill can be modernised, it will be possible to make more profit."

Rich history of Carew and Company

According to Wikipedia, Carew and Co (Bangladesh) is the only licensed distillery producing alcohol made from sugar molasses in Bangladesh and is located at Darsana, Chuadanga. Carew and Co (Bangladesh) Ltd was established in 1938.

Carew and Co (Bangladesh) Ltd. traces its origin to the distillery established by the British businessman John Maxwell in 1803.

He built the distillery in Kanpur, Uttar Pradesh, British India, which is considered to be the first distillery in the subcontinent.

Subsequently, Carew opened branches in Asansol, Katni, and Darsana (East Bengal, which became East Pakistan in 1947).

In 1971 East Pakistan became independent Bangladesh after the Bangladesh Liberation War.

The government of Bangladesh nationalized the distillery at Darsana in 1973. The company became Carew and Co (Bangladesh) Ltd.

Assets of Carew and Company

According to the BSFIC, Carew and Company, established in 1936, has 3,055.64 acres of land in total.

The amount of sugarcane cultivable land is 2,340 acres. In some parts there are other crops, forests and uncultivated areas.

Among the land possessed by the company, sugarcane is cultivable on 2,340 acres. There are some crops and forests in other parts of its land, while encroachers occupy 139 acres of its land.

As of June 2020, Carew and Company has non-current and current assets of Tk1,134.7crore.

Among its non-current assets, there are properties, plant equipment and capital work in progress worth Tk20.82 crore and current assets worth around Tk1,114 crore

The company has a reserve of Tk2.04 crore. Its long-term loans in various banks amount to Tk34.9 crore.

The company has six units, which are: Sugar, Distillery, Pharmaceutical, Commercial Farm, Akandabaria Farm (experimental) and Bio-Fertiliser.

The company started producing an experimental fertiliser named "Carew JaiboSar (Bio Fertiliser)" in 2014 and started selling it at Tk10.

It started producing sanitiserswhen the coronavirus pandemic hit the country.

According to the financial statement of 2019-2020, only the company's Distillery and Pharmaceutical departments have made profit, while all the other departments incurred losses. The Sugar unit suffered the biggest losses.  

Sugarcane threshing and production

Carew and Company's sugarcane threshing activities started on 18 February 2020. Threshing for the season ended on 21 March 2021 without any mechanical problems.

The company threshed 1.11 lakh tonnes of sugarcane during this time. After that, it produced 5,883 metric tonnes of sugar.

However, the company had a target of threshing 1.54 tonnes of sugarcane and 9,625 tonnes of sugar.

In FY2019-20 and FY2018-19, the company's sugar mill had 4,200 metrictonnes of unsold sugar in stock.