Cadbury to protect Ghanaian chocolate production

By Charlotte Eyre

- Last updated on GMT

Related tags Ghana Chocolate Côte d'ivoire

Cadbury today launched a fund to aid its cocoa suppliers
in Ghana, after research suggested that average production in
the region is now 40 per cent lower than the potential yield.

The Cadbury Cocoa Partnership, established in partnership with the United Nations Development Programme (UNDP), is aimed at helping farmers increase production and improve the quality of the beans.

The decision was made after research, funded by the company, showed that the production of some cocoa farms in Ghana is only four to six sacks per year, the company said.

With western confectionery companies being under pressure from high commodity costs, Cadbury is aware that protecting supply is vital in order to keep margins high.

The company is also under pressure to improve profits from shareholders, after receiving last December a threatening letter from investment fund Trian.

Trian, which is led by active investor Nelson Peltz, threatened to take matters out of management's hands if Cadbury did not make a raft of improvements to its operations.

Matt Shattock, President of the BIMA division (Britain, Ireland, the Middle East and Africa) confirmed in a statement that protecting the African supply chain made good business sense.

"Sustainable cocoa production is vital to Cadbury's commercial success: not simply the supply of our most important ingredient, but guaranteeing a reliable, long term source of the right quality cocoa, produced to the high standards our business, customers and our consumers expect," he said.

Although Cadbury uses cocoa beans from several producers around the world, Ghana is a particularly important supply area.

Cocoa beans from that country trade at 10 per cent above the global market price, and are used in iconic Cadbury brands such as Dairy Milk, Wispa, Flake and Buttons.

The managing director of Cadbury Ghana, James Boateng said that the partnership will also help improve the livelihoods of cocoa farmers around the world.

"In the centenary of our relationship with the cocoa farming industry in Ghana, we are incredibly proud to launch the Cadbury Cocoa Partnership in Accra today which we hope will have a lasting impact on the lives of cocoa farmers," he said.

Cadbury said that the programme will help these farmers in four ways: Increasing farmer incomes along with higher yields; introducing new sources of rural income through microfinance; investing in community development; and working with local agencies to decide how to turn plans into action.

The majority of the funds - 70 per cent - will be invested in Ghana, while the partnership will also benefit producers in India, Indonesia and the Caribbean, the company said.

According to the International Cocoa Organisation, African countries now provide about 70 per cent of the world's cocoa, up from 61 per cent in the mid-1990s, with Cote D'Ivoire and Ghana cultivating the lion's share.

Together the two countries account for 65 per cent of global net exports.

Most of the cocoa cultivated in Africa is exported to the major centres of cocoa consumption in Europe and North America, with the Netherlands and the US maintaining their positions as the world's two leading cocoa processing countries, the ICCO added.

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