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Barry Callebaut confirms Ivory Coast expansion

By Lynda Searby , 10-Aug-2011

Cocoa and chocolate products supplier Barry Callebaut has confirmed reports that it plans to upgrade grinding capacity at one of its cocoa processing plants in Ivory Coast from 105,000 to 175,000 tonnes a year.

“We will build a new factory next to our existing factory in San Pedro. The additional factory will grind 70,000 tonnes of cocoa a year. We expect it to start running in spring 2012. This is in addition to our other cocoa processing factory in Côte d'Ivoire, in Abidjan,” Raphael Wermuth, external communications manager with Barry Callebaut, told ConfectioneryNews.com.

He said the group had already confirmed its commitment to further invest in Ivory Coast during the recent cocoa export ban, which resulted in hundreds of thousands of tonnes of cocoa beans piling up in the ports of Abidjan and San Pedro while export cocoa trade was suspended for three months.

Wermuth added: “This investment is part of our planned capital expenditures to further grow our overall chocolate and cocoa business activities all over the world. Our target is to annually grow our sales volume by 6-8 per cent on average from 2009/10 to 2012/13. For this, we need to build the corresponding production capacity.

He confirmed that the company had cocoa processing operations in other major cocoa growing countries such as Ghana, Cameroon, Brazil and Malaysia.

“Being present in origin countries, gives us a competitive cost advantage,” said Wermuth.

Political tension

Ivory Coast is the world’s largest cocoa producing country and was once one of Africa’s star performing economies, but years of political tension have had a major social and economic impact, and today it is among the poorest countries in the world.

Rather than withdrawing from Ivory Coast in view of its complex situation, Barry Callebaut said it was convinced that the most effective way of changing the world of cocoa farmers in West Africa for the better was through an active local presence.

“We have been present in the country for 50 years now. We have faith in this country,” said Wermuth.

Cocoa is a significant contributor to the economy of Ivory Coast. Between 700,000 and one million farmers grow cocoa, most of whom are smallholder farmers working their own land.

The supply chain there is very fragmented: farmers may sell their beans to the cooperative of which they are members or to private buying companies known as “traitants”. The cooperatives may choose to sell the beans to local processors, such as Barry Callebaut, or may sell directly to the governmental export authorities.

Barry Callebaut said that overall, 60 per cent of the cocoa it buys in Ivory Coast comes from cooperatives, which ensures it is traceable to each cooperative, and through the internal control systems of the cooperative, in most cases back to the farmers.

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