Barry Callebaut 'steps up' production at sites beyond Ivory Coast

By Jane Byrne

- Last updated on GMT

Related tags Ivory coast European union Côte d'ivoire International trade

Barry Callebaut has a contingency plan in place in light of ongoing Ivory Coast turmoil and has stepped up production at its cocoa processing facilities elsewhere to meet its customers’ needs.

However, the industrial chocolate supplier stressed that its two sites in the West African country are still running.

Raphael Wermuth, external communications manager at the Swiss headquartered group, said that the company bought and exported the majority of the cocoa beans it required from the Ivory Coast in order to fulfil its processing needs, prior to the imposition of restrictions on exports from the world's leading cocoa producer.

He said that this explains why the current EU sanctions and the export ban ordered by president-elect of the Ivory Coast, Alassane Outtara "is expected to have limited impact"​ on the company's supply chain this year.

Wermuth told this morning "Webelieve we are taking the necessary steps to enable us to honour our customer contracts during 2011​."

Cocoa confiscation threat

And Wermuth declined to comment on media reports this week that some cocoa exporters were preparing to resume payment of export taxes to Ivory Coast's Laurent Gbagbo.

According to a Financial Times report, some traders were set to comply with a demand by Gbagbo that they pay taxes on stocks of cocoa by the end of March or face confiscation of their stocks.

However, a cocoa trade source told Reuters today that an industry pact not to export was still holding.

Cocoa bean exports from the Ivory Coast have ceased since the end of January, following a call from Outtara for a suspension of all exports, including cocoa and coffee, in a bid to cut off funding from his rival Gbagbo following on from disputed elections in the country at the end of last year.

Exports have all also been hindered with the imposition of EU sanctions on trade with the Ivory Coast, with the result being 475,000 tonnes of cocoa beans piled up in the Ivorian ports of Abidjan and San Pedro, awaiting export.

Threat is 'illegal' says EU

EU High Representative for Foreign Affairs and Security Policy, Catherine Ashton, in a statement on 10 March, said she considered the threats to confiscate cocoa stocks made by Laurent Gbabgo as illegal.

"Ex-president Gabgbo has no right to carry out any nationalization or confiscation of goods since he is no longer the legal president of the country," ​she remarked.

She urged: "European enterprises to continue to comply with the President Ouattara's temporary export ban and with the sanctions announced by the EU to secure a rapid transfer of power."

Earlier this month, Laurent Pipitone, interim director of economics and statistics division of the International Cocoa Organisation (ICCO), speaking to this publication, cautioned that there are approximately five months of cocoa stocks and that there is not any reason for industry to be concerned “as long as the export ban does not last too long.”

Robust demand serving premium labels

Meanwhile, Swiss premium chocolate maker Lindt & Spruengli, in announcing last week a net profit hike of over 25 per cent to CHF241.9m ($262.6m) for 2010, claims that robust demand in the US and UK has so far helped it offset higher costs related to commodity speculation and the political unrest in the Ivory Coast.

And the company said a further recovery of the global economy and an improvement in consumer sentiment could be expected in the current financial year.

But it warned that instability would continue in the commodities market, particularly for cocoa and that “the trend of prices for other raw materials, such as milk, sugar and nuts, also remains hard to predict.”

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