Indigenous cocoa processor calls for support

Government must adopt a deliberate policy to support indigenous cocoa processing companies to become competitive, Mr Eric Mensah, General Manager, Finance and Administration Plot Enterprise Ghana, an indigenous cocoa processing company has said.

This, he said, could be done through the provision of special concessions to encourage local indigenous processors. "Government must understand the peculiar operating environment of the indigenous cocoa processing companies and not lump them together with the international processors," he said.

Mr Mensah, who was speaking on the sidelines of the 82nd Izmir Fair in Turkey, said encouraging local industries and ensuring that they were strong was important for the country's development and for job creation.

He said the supply of cocoa beans to indigenous processors remained a major challenge to the industry because of pressure on the light crop production, which is mainly meant for local processing.

For example, while the cocoa processing companies require about 400,000 metric tonnes of beans, the light crop production could only meet about less than half that need. "We are yet to get the level of throughput. We are currently doing between 60 and 70 percent of our installed 32,000 metric tonnes capacity," he said.

Reacting to threats of removal of discount on the light crop cocoa beans that is supplied to local processors because of the reason that they have outlived their usefulness, Mr Mensah said if the plan was implemented, it would further erode the competitive advantage of indigenous processors.

He lauded the strong support the company had enjoyed from COCOBOD and Cocoa Marketing Company since the start of its operations in 2010.

He said apart from the challenge of the supply of the beans, unreliable electricity supply in recent years had meant that the company needed to rely heavily on diesel-powered generators for its operations, leading to high additional cost overruns that rendered the company uncompetitive.

Another crippling issue for indigenous processors is the high cost of funds, which render them uncompetitive compared to international processors, which are able to borrow at lower interest rates on the back of the financial clout of their parent companies.

Mr Mensah said indigenous processors also had to sell their products at heavily discounted rates because of origin that is coming from cocoa producing countries, unlike the international processors whose products were absorbed directly by the parent companies.

Plot Enterprise is a 40 million dollar investment with a 32,000 metric tonne capacity inaugurated in 2010, adding to the local grinding capacity. It produces cocoa liquor, cocoa butter and cocoa cake.

Mr Mensah said the participation in the Izmir Fair was to enable the company to explore opportunities to expand into the Turkish market.

The Ghana Export Promotion Authority (GEPA) has facilitated the participation of 12 Ghanaian exhibitors in the Izmir Fair, which ran from 29th August to 2nd September. The participating companies included pharmaceuticals, food and beverages and cosmetics.