The birth of the Demerara Tobacco Company Limited (DEMTOCO)
By Tota Charran Mangar
Stabroek News
September 5, 2002
The Demerara Tobacco Company Limited (Demtoco) is a subsidiary of British American Tobacco (BAT) Industries, formerly British-American Tobacco Company Limited.
The British-American Tobacco Company Limited itself was formed and registered in London on September 29, 1902 to acquire the “recipes, trademarks and export business of the Imperial Tobacco Groups Limited and of the American Tobacco Company” and “to own and operate their overseas subsidiaries outside the United States of America.” Its first chairman was the legendary James Buschanan Duke.
In 1911 the United States Supreme Court declared that the American Tobacco Company was a monopoly and therefore illegal and it should cancel its original covenant with BAT and Imperial Tobacco Group. As a consequence the American Tobacco Company divested itself of its BAT shares and BAT subsequently became a quoted company on the London Stock Exchange. Most of the disposed American Tobacco Company shares were acquired by British Investors. From then on BAT became free to conduct its business independently in all parts of the world with the exception of the British Isles where the 1902 territorial agreements with Imperial Tobacco remained in force.
The British American Tobacco Company Limited (BAT) made its entry into the then colony of British Guiana in 1928 when it established a small manufacturing concern in Regent Street through Mr Phillips in Trinidad. This development was certainly not surprising as by this time BAT was extending its operations worldwide and the Caribbean area offered tremendous potential. Incidentally, this was also the year when Great Britain introduced Crown Colony form of government in the country, thereby effectively terminating the age-long Dutch inherited governmental institutions - the Court of Policy and the Combined Court.
It could be argued that this 1928 period was a time of serious economic distress due mainly to the adverse effects of the first World War and low world market prices for products. At the same time the Cigarette business was already a vibrant one in the country involving a number of business firms.
Indeed, the local newspapers of 1928 carried advertisements which revealed that J.P. Santos was the agent in British Guiana for ‘SEA LORD’ Cigarettes; Bankard and Co. Ltd was the agent for COMMANDER and CAPSTAN Navy cut Cigarettes; Bookers Amalgamated Groceries Limited was the agent for CRAVEN A, FROTHBROWER, ARDATH, KENILWORTH, SARONY, STATE EXPRESS and VARSITY; Garnett and Co Ltd, was responsible for DU MAURIER while Brodie and Rainer was the agent for five brands namely; MANILA, THREE STARS, ISMID, LORD CECIL and YENIDJES.
Against this background BAT discontinued its original arrangement with Mr Phillips and in March, 1930 it formed a sales organisation when it established an office and a stockroom in a small wooden building in Water Street. This was referred to as the British American Tobacco Company Limited (“Demerara Depot”). In April, 1932 the Guiana Match Factory Limited commenced local manufacture of cigarettes. Its brand was LIGHTHOUSE, named after Georgetown’s famous lighthouse landmark located near the Demerara River, in the Kingston area.
A major development took place shortly afterwards when the BAT Company decided to install a cigarette manufacturing unit in a wooden building adjacent to the Water Street Office and stockroom. This manufacturing unit was opened on June 14th, 1934 and on the same day the Demerara Tobacco Company Limited (Demtoco) was formed to replace the British-American Tobacco Company Limited (Demerara Depot). On this step The Daily Argosy in its January 15th, 1934 issue carried a news item captioned: “Demerara Tobacco Company Limited Registered yesterday”.
The article revealed that the New Company was registered with an initial capital outlay of $40,000.00 and that it “will launch out as growers of tobacco, makers of, and dealers in tobacco, cigar, cigarettes and snuff and any business arising out of, or in connection with any of such commodities.” The Demerara Tobacco Company had emerged at a very difficult period of the country’s history. After all, the 1930s in Guyana, like other British Territories in the Caribbean was a period of grave social and economic turmoil and was characterised by numerous strikes, riots and disturbances as the labouring class vented its feelings. The challenge was therefore great for the new company at this its infancy stage of operations in Guyana.