Joint venture intends to strengthen sustainable cocoa sourcing in Indonesia

By Nilpa Shah

- Last updated on GMT

JV to tap into the increasing cocoa demand in Indonesia
JV to tap into the increasing cocoa demand in Indonesia

Related tags: Barry callebaut, Chocolate

Leading cocoa manufacturer Barry Callebaut and exporter, P.T. Comextra Majora have teamed up on a new processing facility to satisfy the growing demand for cocoa products in the Asia Pacific region.

The facility is to be built in Makassar (Sulawesi) and operations are expected to start in early 2013.

The newly formed venture company, P.T. Barry Callebaut Comextra Indonesia, will oversee the construction of the factory as well as all future production.

Zurich-based pod to pallet cocoa producer, Barry Callebaut, said it intends to use the plant and its partnership with Comextra to “intensify the diversification​” of its cocoa sourcing and processing activities.

It also aims to implement a sustainable business model in order to ensure that there is an adequate supply of cocoa to meet the growing demand for chocolate and other cocoa-based products.

“Win-win” partnership

According to a Rabobank report, Indonesia has emerged as the world’s third-largest cocoa exporter, producing 844,246 tonnes of cocoa in 2010. Euromonitor estimates that it accounts for approximately 15% of the global market.

Both companies already have a long-standing business relationship spanning over ten years. Under the conditions of this new venture, Comextra will enter into a long-term bean supply agreement and will own 40% of the new company, while Barry Callebaut will possess the remaining 60%.

Speaking to FoodNavigator-Asia.com, Raphael Wermuth, spokesman for Barry Callebaut, said that it was a “logical​” decision to partner with Comextra because it has “a deep knowledge of the local cocoa bean market​” and an “established on-the-ground bean sourcing network​” in Indonesia.

He added that Comextra’s local presence combined with Barry Callebaut’s “in-depth knowledge in cocoa processing​” means that the close co-operation “is a win-win for both companies​.”

Kismono Hari Murty, director at Comextra, agrees stating that the joint collaboration will be an “ideal synergy​” and will help to increase the “efficiency of production​.”

‘Sustainable Cocoa’

According to Wermuth, “consumer demand for chocolate is growing by 2-3% per annum​.” Euromonitor also estimates that cocoa-powder prices are set to remain high, “driven by strong demand for hot drinks and chocolate coatings in emerging Asian economies​.”

However to meet future chocolate demand, Wermuth acknowledges that “Barry Callebaut sees significant challenges ahead in securing sufficient supplies of high quality, responsibly grown cocoa​.”

He says that Barry Callebaut “aims to intensify its efforts in direct cooperation with the farmer communities to increase cocoa yields and the respective quality​” acting through various direct sourcing programmes and initiatives.

Murty adds that by building a factory in close proximity to cocoa plantations, particularly in Sulawesi, where according to the Rabobank report, 60% of Indonesia’s cocoa plants are located, it is “easier to establish a sustainable partnership with the smallholder cocoa farmers​.”

Wermuth states that it is too early for the company to comment on whether it plans to expand its cocoa processing facilities in Asia Pacific, but he does say that it “will further develop​” its sustainable initiatives, including an agronomic research programme that it recently set up in the region.

Related topics: Business, Industry growth, South East Asia

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