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Callebaut bids to boost viability of Malaysian cocoa

By Jane Byrne , 27-Apr-2011

Related topics: Outsourcing, Commodities, Cocoa & Sugar, Barry Callebaut

Barry Callebaut, in a bid to meet its strategic need to diversify its cocoa origin and boost the viability of cocoa production in Malaysia, has announced a new research programme.

The Zurich headquartered industrial chocolate supplier said the new project, covering a total area of 10ha of an existing cocoa plantation, will include trials of agricultural techniques including new pruning and grafting methods, the use of organic fertilizers, organic cultivation approaches and agro-forestry principles.

A further area of focus will be improved post-harvest cocoa treatment techniques to enhance quality of the Malaysian cocoa bean and achieve ‘zero-defect’ status, said Callebaut.

A spokesperson for Callebaut told ConfectioneryNews.com that this current research initiative is stemming from its ongoing collaborative work with the Malaysian Cocoa Board.

Last March saw the Swiss group teaming up with the Board in a project that involves Callebaut helping the country’s cocoa growers optimise their fermentation methods using microbial starter cultures, while utilising the Board’s research facilities.

The first preliminary results from the new crop cultivation trials are expected in June 2012, added the Zurich based company.

It added that the new project is being conducted in collaboration with the Malaysian company Kuala Lumpur Kepong Berhad.

The Swiss group bought a 60 per cent stake in that planter’s cocoa and chocolate manufacturing unit – KLK cocoa - back in 2008 in order to expand its global cocoa processing capacities.

Earlier this month, Callebaut announced that it had also bought out the remaining 40 per cent stake in KLK, now operating under the name - Barry Callebaut Malaysia Sdn Bhd - to “further strengthen its footprint in fast-growing Asian markets.”

The cocoa unit is said to have annual sales of RM500 million (€99m).

Asian confectionary markets continued to grow for Barry Callebaut. In its half year results, it reported a significant increase in sales volume from the region, noting a hike of 9.4 per cent to 26,683 tonnes, led by India, Japan, Malaysia and China.

Callebaut CEO Juergen Steinemann noted, back in March 2010, that Malaysia and the Asia Pacific region provides it with logical cocoa sourcing alternatives to West Africa.

And he added that cocoa supplier’s controlled fermentation process would ensure that the taste of Malaysian cocoa would eventually match that of the West African bean and thus meet the demands of European and North America consumers used to the flavour of West African cocoa.

Malaysia and neighbouring countries currently produce about 15 per cent of the annual global cocoa harvest.

However, there is serious competition from other commodity crops such as rubber and palm trees to the existing cocoa plantations in Malaysia, according to Dato’ Dr Azhar Ismail, director general of the Malaysian Cocoa Board.

Last March saw Ismail welcoming the teaming up with Callebaut “as an excellent opportunity to further develop and sustain the cocoa industry in our country.

If our cocoa farmers can earn more, they will continue to grow cocoa. This is good for our economy as well as for the biodiversity of our agricultural sector.”