Accra, Aug. 29 - Agribusiness giant Cargill will start production at a 65,000 tonne-capacity cocoa processing plant in Ghana in November this year, a company official said. The plant would raise domestic grinding capacity in the world's second-biggest cocoa grower by more than 25 percent to almost 320,000 tonnes as the country targets a major increase in harvesting and processing amid high prices on world markets.
"We started test running the plant a few weeks ago ... it's going on well," Cargill Ghana's Commercial Director Taco Terheijden told Reuters late on Thursday.
U.S.-based Cargill, one of the world's largest private companies, will process cocoa into butter, powder and liquor at the plant in the eastern port of Tema, he said.
The firm had to import most of its equipment from Europe, which contributed to a major cost overshoot.
"Costs have risen to $100 million from an initial estimate of $70 million due to the weakening of the dollar...," Terheijden said.
Ghana has 253,000 tonnes of installed processing capacity according to data from Cocobod, which markets Ghanaian cocoa, while the country's crop has averaged 670,000 tonnes over the past four years.
The West African country has set itself an ambitious target of harvesting at least 1 million tonnes of cocoa a year by 2010, mainly by using more fertilisers and high-yielding seeds. Based on this, Cocobod aims to have half the crop processed in Ghana.
Cocoa prices are near 28-year highs, with New York futures closing at $2,860 per tonne on Thursday on expectations of strong future demand.
Cargill has signed an agreement with Cocobod for bean supply to feed the plant, which has the potential to increase capacity to 120,000 tonnes, Terheijden said.
Rival agricultural firm Archer Daniels Midland is also building a processing plant in Ghana. Located in the second-largest city of Kumasi, it is expected to start working in the first quarter of 2009 with capacity of 30,000 tonnes.