Olam International is planning to invest $43.5m to build its first, large greenfield cocoa processing plant in the Ivory Coast as well as additional primary processing and warehouse facilities.
The Singapore-based company said the new cocoa processing plant, which is to be built in Abidjan, will process about 60,000 metric tonnes of cocoa beans when it is fully up and running.
Sourcing beans from the nearby primary Olam processing plant in Abidjan, the new facility will make cocoa liquor, butter and cake for global chocolate manufacturers.
The plant is due to be up and running in 2012 and by the end of the second year of production (end-FY2014), it is expected to be producing 48,000 metric tonnes of cocoa products.
Olam claims that processing cocoa beans into intermediate cocoa products in the Ivory Coast is “a fundamentally attractive industry”. According to the company, the country offers a large source of high quality cocoa beans – it accounts for about 40 per cent of total global supply - and a supportive regulatory regime.
Ultimately, Olam said its new facility is predicted to deliver a turnover of about $175m and an EBITDA margin of 10-12 per cent.
Gerry Manley, managing director and global head for cocoa at Olam, “Our investment into cocoa processing is part of our global cocoa strategy to integrate our value chain selectively by participating in attractive profit pools that will enhance not only our margins but also our overall competitive position in cocoa globally.”
In addition to the cocoa processing facility, Olam is planning to build a primary processing and warehousing facility in San Pedro. This will be a drying, cleaning and sorting plant, with the necessary storage facilities to ensure that Olam can continue to develop its bean export business in the Ivory Coast.