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HomeNewsArchivesGov. DeJongh Makes Cruzan Agreement Official

Gov. DeJongh Makes Cruzan Agreement Official

Gov. deJongh shown signing the Cruzan deal.Gov. John deJongh Jr. Thursday signed an agreement creating a 30-year public-private partnership between the V.I. government and Cruzan VIRIL Ltd., ensuring that Cruzan Rum will remain on St. Croix for decades to come.
The agreement with Cruzan VIRIL allows for expansion of production capacity for Cruzan Rum in the Virgin Islands while strengthening the relationship between the government and Cruzan, which dates back to the 1700s.
The economic development and investment agreement, which was approved by the Legislature on Oct. 27, will generate a significant long-term revenue stream for the government, according to a press release from Government House.
“The passage of this significant bill forecasts a better future for all residents of this territory," deJongh wrote in his letter of transmittal to Senate President Louis Patrick Hill. "It was the combination of the potential for this Cruzan agreement, along with the existing Diageo agreement, that provided the basis on which banking institutions approved a $250 million government loan previously authorized by the Legislature. As a result, government employees have not been faced with the furloughs or layoffs endured by many of their state and local government counterparts.”
Under terms of the agreement, the government has committed to continue to share the costs of molasses, a critical input in rum production, as it has for the past several decades.
“Additionally, the government will continue to invest a portion of the tax revenues generated from the sales of locally-produced Cruzan Rum and the V.I. rum industry,” deJongh said. The government “will also provide financing for the construction of a state-of-the-art wastewater treatment plant and to expand capacity of the Cruzan distillery by more than 50 percent.”
Fortune Brands, the Illinois-based conglomerate that owns Cruzan, aims to position it as a prestige brand in the company’s line of alcoholic beverages. But to do that, the plant will need to increase capacity while complying with environmental regulations. Building the new wastewater treatment facility will remove that bar and ensure that Fortune will not have to take the label off-island to achieve adequate production.
“With financing in place for the development of its needed wastewater treatment facility, Cruzan will be able to comply with the Territorial Pollutant Discharge Elimination System permit which will result in the removal of the infamous “brown stain” from the south shore of St. Croix and at the same time allow for increased production at the Cruzan facility,” deJongh added.

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