Malaysian cocoa giant to make further investment in Côte d'Ivoire

Guan Chong Berhad (GCB), a Malaysian producer of cocoa-derived food ingredients, has signed a memorandum of understanding to acquire a 25% stake in Transcao Côte d'Ivoire, a cocoa processing company in Cote d’Ivoire. The move follows the inauguration of GCB’s first African cocoa bean grinding plant in the world’s biggest cocoa producing country last year, with a capacity of 60,000 tonnes. Processing beans in Cote d’Ivoire allows GCB to shorten the beans-to-ingredients cycle, mitigate supply chain risks and offer enhanced control over production and shipping schedules. This setup positions GCB to directly supply cocoa ingredients to key markets in Europe.

Transcao currently operates a plant with the ability to process 50,000 tonnes, and a second facility is expected to launch by the end of 2024, bringing the total capacity to 190,000 tonnes. The company is majority-owned by the state-backed Conseil du Café-Cacao (CCC), Côte d'Ivoire’s regulatory body overseeing the development of the cocoa and coffee sectors.

Côte d'Ivoire produces about 40% of the world’s cocoa, yet most of its output is shipped abroad as unprocessed beans. Transcao is part of a broader national strategy to increase domestic cocoa processing to at least 50% of production. The government has introduced tax breaks and other incentives to bolster the industry's appeal. CCC officials have highlighted that the deal with GCB will bring valuable technical expertise to Transcao. The partnership also includes a commitment by GCB to hire local staff in frontline commercial and technical roles.

GCB operations span four continents, with production facilities capable of grinding 330,000 tonnes of cocoa beans annually. The company produces a range of ingredients, including cocoa mass, cocoa butter, cocoa powder, and industrial chocolate, with a combined output of 215,000 tonnes of value-added and chocolate products.

Earlier this year, cocoa prices surged to multi-decade highs due to lower-than-expected production in Côte d'Ivoire and Ghana, primarily driven by unfavourable weather conditions and the ongoing impact of swollen shoot disease. With these two countries accounting for a significant share of global cocoa output, the reduced production led to a tightening in global supply. However, Côte d'Ivoire recently raised its cocoa production forecast for the 2024-2025 season by up to 10%, estimating a harvest between 2.1m and 2.2m tonnes, following improved rainfall.

References

‘Malaysia’s GCB shakes up competition for Côte d’Ivoire cocoa’, The Africa Report, 04 August 2023

‘GCB Bursa Announcement - Project Mammoth’, GCB, 09 October 2024

‘Ivory Coast eyes further Asian expertise to expand cocoa processing’, Reuters, 10 October 2024

‘Ivory Coast raises 2024-25 cocoa forecast on new pod count’, BNN Bloomberg, 18 October 2024

‘GCB Cocoa Côte d‘Ivoire’, GCB, Accessed 22 October 2024

‘Annual Report 2023’, GCB, 2024