Spanish chocolate and cocoa processor Natra has more than doubled its operating profit in its ninth-month results helped by relaxing cocoa prices, North American expansion and a shift to value added products.
The firm’s cocoa and chocolate business maintained its turnover at previous year levels but increased operating profit to €10.3m ($13.4m) compared to €4.5m ($5.9m) last year.
Cocoa market 'relaxing'
Speaking to ConfectioneryNews.com, Natra's head of investor relations and communications Glòria Folch, said that the main growth driver was raw material costs.
“The cocoa market has been quite volatile for the last couple of years. Raw materials were really expensive. Since the beginning of this year some raw materials have been relaxing,” Folch said.
Last year, Natra had been tied to a futures contract that proved expensive due to conflict in the top cocoa producing nation, the Ivory Coast, during presidential elections.
Natra since secured a cheaper contact after the situation in the Ivory Coast stabilized and brought down cocoa prices.
The average cocoa price stood at $3,165 per ton in January 2011 but was down to $2,308 at the start of this year, according to figures from the International Cocoa Organization (ICCO).
Natra’s chocolate and cocoa business has two divisions.
The Industrial Goods division makes up 25% of turnover for the firm’s cocoa and chocolate business and supplies cocoa butter, powder and coatings to manufacturers. High cocoa prices have helped this business segment to grow.
The Consumer Goods division manufactures finished products, such as countlines, mainly for private label. The segment accounts for 75% of sales in Natra’s chocolate business. Sales for this division fell 1% to €172m ($225m) during the nine-months amid weakening chocolate consumption in Europe.
Natra is expanding its operations abroad and has chosen North America as the spearhead of its development strategy outside of Europe.
It is also hoping to grow in Asia and recently signed a Belgian chocolate supply contract in China with an unnamed distributor that it says boosts sales in that market by 70% in 2012.
Folch said that her company had abandoned low margin products such as traditional chocolate slabs/tablets and had moved to value added products, such as chocolate spreads and premium slabs with fillings.
“We are increasing our production of Fairtrade. We understand that it’s a trend for the future,” she added.
Natra produces some of its finished products using Fairtrade and UTZ Certified cocoa.