Trading begins in CPC shares on the GSE

Trading in shares of Cocoa Processing Company (CPC) commenced on Friday after it was officially listed on the Ghana Stock Exchange in government's efforts to divest its shares in state enterprises through the bourse.

It was also to help to enhance trading volumes and deepen the liquidity of the stock market to enable it to play its financial intermediation role in the economy.

CPC, a major cocoa processing company, thus became the 25th listed company to have its shares traded on the bourse, following a government decision to off-load 25 per cent of its shares in the Company to the public.

Over 215.3 million shares out of 861.4 million issued shares were offered to the public.

A total of 161.1 million shares were paid for in cash, representing 74.83 per cent of shares offered, 26.2 million shares were purchased under the government approved "Employees Special Share Purchase Agreements" (ESSPA) scheme.

Under the Government scheme employees had special dispensation to buy the shares and pay for them over a 12-month period.

CPC Employees took up 17.2 million shares while NTHC holdings lead managers of the floatation had underwritten 10.7 million of the shares.

Mr Yaw Osafo-Maafo, Minister of Finance, reiterated government commitment to sell its shares in state enterprises through the Ghana Stock Exchange.

He said he had submitted a memorandum to Cabinet on plans for the divestiture of government holdings in other state companies through the bourse.

Mr Osafo-Maafo tasked the management of CPC to continue to be good corporate citizens by honouring their environmental regulations as well as its tax obligations to the state.

They should also conduct their business in a professional and transparent manner to serve as a barometer for measuring the performance of similar companies in the country.

Dr Kwame Awuah, Managing Director of CPC, said the company was currently at the various stages of implementing an expansion programme that would boost its processing capacity from the present level of 25,000 tonnes per annum to 65,000 tonnes per annum by the end of this year.

There are also plans to increase the confectionery production from 2,000 tonnes per annum to about 10,000 tonnes within the next three years.

Dr Awuah appealed for continuous government support for greater local processing of cocoa so that the company would continue to generate substantial revenue for the country and to pay high dividend to its shareholders.

He expressed the readiness of the CPC Board, the Management and the entire workforce to work hard to increase productivity and generate more profit to generate investor interest.

Mr Kwame Sarpong, Chief Executive of Ghana Cocoa Board, said CPC's planned expansion would have a significant impact on the company's value addition potential, lift the annual volume of processed cocoa to 190,000 tonnes by the end of 2004 and increase CPC's share to 26 per cent.

He said the planned factory expansion was also expected to create 260 new jobs, which added to CPC's current 560 employees, would take the labour strength to 820.

Mr K. S. Yamoah, Acting Managing Director Ghana Stock Exchange, said the Council and the Management of the Exchange would aggressively pursue private sector listing as well as listing from government divestitures.

"We want to position this exchange as truly attractive investment avenue particularly for domestic investors by creating greater investor awareness and confidence in the market and by improving on the efficiency and liquidity in the market place."

Mr Yamoah, therefore, asked for government's unwavering commitment and action to strengthen the Exchange for greater reform of corporate Ghana.

About 95 per cent of CPC's production is exported while five per cent is sold in the domestic market.

CPC supplies inputs to the local subsidiaries of processing giants like Nestle and Cadbury for the production of their brands of cocoa and chocolate products.

CPC was established in 1965 as a joint venture between the government of Ghana and Drevia Group of Companies to process cocoa beans into semi-finished product.

It was incorporated in 1981 as a limited liability company, wholly owned by COCOBOD.

CPC gained one cedi to close at 626 cedis in its initial trading on the Exchange.