Chinese investors eye cocoa processing factory in Western Region
Chinese investors have begun discussions with the Ghana Cocoa Board (COCOBOD) to construct a high-capacity cocoa processing factory in the Western Region.
COCOBOD’s Chief Executive, Joseph Boahen Aidoo, enumerating some investment opportunities in the country’s cocoa industry in Accra said: “We are optimistic that more companies will get on board to support government and COCOBOD achieve the target of ensuring that at least 50 percent of cocoa produced in Ghana is processed to tertiary level to boost local consumption.
“It is the policy of COCOBOD and government to process more than 50% of cocoa produced in Ghana. Government and COCOBOD further desire to deepen processing of cocoa into finished products for local, regional and international consumption.”
The West Africa market, with an estimated population of about 350million, provides adequate opportunity for investors to target the sub-regional market and sweet-toothed countries in Asia.
China, Mr. Aidoo noted, “offers a big market for cocoa confectioneries and related products, and we are collaborating with them in this regard”
Mr. Aidoo indicated that there are numerous investment opportunities in the cocoa sector, and that investors will have to seek independent appraisal of viability for specific areas of interest as well as understand the laws, bye-laws and regulations governing the cocoa sector of Ghana.
He said there are a lot of small and medium businesses that have taken advantage of the rich opportunities in the sector to create jobs and boost economic growth.
Investment opportunities in the cocoa industry
On Commercial Cocoa Farming, Mr. Aidoo explained that cocoa is cultivated in six out of the 10 regions of the country.
However, the average size of cocoa farms in the country is about four hectares – mostly owned by smallholder farmers. Opportunity exists for potential investors to establish modern commercial cocoa plantations.
The Cocoa Research Institute of Ghana – CRIG, a division of the Ghana Cocoa Board, Mr. Aidoo indicated is available to provide the necessary advisory services on suitability of soils and general cocoa agronomy to potential investors. And improved high-yielding cocoa varieties which start bearing 2-3 years after planting will be supplied to investors by the Seed Production Division of Ghana Cocoa Board for the establishment of cocoa plantations.
He stated that government is in partnership with the COCOBOD to deepen private sector participation in the supply and distribution of farm inputs and marketing logistics. The private sector participates in the procurement and distribution of approved agro-chemicals, including fertiliser and other farming implements.
Opportunities, according to Mr. Aidoo, exist for procurement of marketing inputs such as jute bags, tarpaulins and weighing-scales – and the private sector should seize this opportunity.
He said COCODOD requires a more than US$1billion syndicated loan annually to finance its crop purchases, and this financing is usually raised from local and international private banks.
The facility, he said, is usually backed by receivables from cocoa sales contracts. In addition, local banks provide bridge liquidity to licenced Cocoa Buying Companies in order to facilitate their turn-around and turn-over. Private sector investors in the financial sector are invited to participate in providing funding for business in the country.
“The Cocoa Research Institute of Ghana at Akyem Tafo has researched and developed household products – such as pomade, soaps, jam, vinegar, wine and brandy – from cocoa by- products which ordinarily go waste. Opportunity exists for investors seeking to undertake commercial development and marketing of these products for the local and/or international markets,” he said.
He added: “Licenced Buying Companies for cocoa, coffee and shea-nut remain entirely in the hands of private sector investors. In the case of coffee and shea-nut, private sector investors also undertake external marketing of these products in the international market.
“Investment opportunities exist in the internal marketing of cocoa, coffee and shea-nut, as well as export marketing for coffee and shea-nut.”
He added that: “COCOBOD purchases and makes available fertiliser and agro-chemicals annually for farmers to boost cocoa production. This programme is anticipated to expand rapidly under a new arrangement to sell fertilisers at subsidised cost.
“Government and COCOBOD will provide the enabling environment for investors who intend to go into setting up chemical formulation and fertiliser manufacturing plants in Ghana.”
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Source: Business & Financial Times