Cocoa processor in Cameroon eyes export market with establishment of US$73.8m processing plant

CAMEROON – Atlantic Cocoa Corporation, an Ivorian cocoa processor with operations in Cameroon is set to commence operations at its newly built processing plant worth XAF40 billion (US$73.8m).

According to reports by Business Cameroon, the new factory has a production capacity of 48,000 tons expandable to 64,000 tons and is scheduled to load its first derived products for exports on December 12, 2020.

The plant was scheduled to be operational since 2018 but it encountered several challenges, namely insufficient energy and water supply, poor quality of communication and internet networks, insufficient storage and destocking capacity at the port, among many others.

It entered its implementation stage in 2015 with the financial support of BGFI Bank.

Commencement of operation of the processing factory comes at a time that the government of neighboring country Ivory Coast is seeking to increase the country’s cocoa processing capacity with the construction of two new cocoa processing units in Abidjan and San Pedro with CFA Francs 216 billion (US$389 million) investment.

Ivory Coast targets to locally process 100% of its cocoa by 2025

The new units will have an annual processing capacity of 50,000 tons of beans each, adding to the current installed capacity of 710,000 tons per year.

Construction works which will take 2 years have been bestowed on China Light Industry Design Engineering Company, reports Ecofin Agency.

According to the country’s Coffee and Cocoa Council (CCC), 40% of output will be channelled to China.

The project will also boost storage space as two storage warehouses with a total capacity of 300,000 will be constructed. In addition to that a training center for cocoa trades will be established.

The extra storage space will allow suppliers to hold back beans from the market to buoy prices and help maintain farmers premium.

The West African country is targeting to locally process 100% of its cocoa by 2025 in a bid to fetch higher value from the crop further supporting the growth of the sector.

The efforts are also geared towards ensuring the operations along the cocoa value chain are undertaken in a sustainable way with focus on ending poverty, human rights abuses and deforestation in the sector.

Call for establishment of regulations to govern cocoa sector operations

Recently a global network of non-governmental organizations (NGOs) and trade unions published a biennial report titled, the Cocoa Barometer, calling for development of regulations aimed to tackle the issues facing the cocoa industry.

The report comes after top producers Ivory Coast and Ghana stated in a letter that they will be cancelling cocoa sustainability schemes which U.S.-based chocolate maker, Hershey runs in their countries.

The cocoa producers also accused the company of trying to avoid paying a cocoa premium aimed at combating farmer poverty. However, Hershey responded that it is fully participating in the scheme to pay West African farmers a living wage and will continue to do so.

After two decades of voluntary interventions that have produced minimal impact, the report calls on governments of major consuming nations to introduce laws that hold companies accountable for environmental and human rights abuses in their supply chains.

According to the report, a fair price for cocoa farmers is crucial and chocolate companies must find a way to deliver this is by making farmer income a key part of their sustainability schemes.

Current schemes make use of auditors who certify cocoa as ethically sourced, allowing companies to market their chocolate as such and charge a premium for it. This has created a volatile earning structure for farmers within the cocoa ecosystem.

While chocolate manufacturers derive high profits from cocoa, cocoa farmers only receive a fragment of the world market price for beans. This is largely due to local trading structures, taxes and also the quality of the beans, the report shows.

Within the global value chain, most of cocoa’s revenue is derived after the beans have reached abroad, leaving cocoa farmers and workers across Africa to survive on less than US$1.25 daily.

As chocolate companies continue to compete for higher market shares and profits, millions of cocoa farmers bear the costs by getting little to no share from revenue generated.

The report indicates that in 2014, the total global retail value sales of chocolate confectionery reached 100 billion dollars, an increase of 20 billion.

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