Lagos, Sept 23 - Nigeria's top cocoa grinder plans to expand its capacity to 60,000 tonnes per annum in the next 12 months after raising about 4 billion naira ($34 million) from a private placement, its chief executive said on Monday.
The move follows the completion earlier this month of a long-delayed upgrade of the plant to 17,500 tonnes from around 10,000 tonnes, Multi-Trex Ltd managing director Yusuf Isiaka told Reuters in an interview.
"We are now raising installed capacity to 60,000 tonnes. New machinery will start coming in at the end of October through to February. The expansion will last 12 months," Isiaka said.
The company had planned to increase capacity to 18,000 tonnes in 2006, but the expansion was delayed after it failed to raise around 500 million naira it then needed.
Multi-Trex had sought to raise 6 billion naira through a private placement that closed on July 7. The operation was only about 70 percent successful, but Isiaka said the firm would still raise the balance.
"There is nothing to worry about because we have secured enough guarantees and commitments to achieve our target of 6 billion naira," Isiaka said.
The company plans to list on the Nigerian Stock Exchange before the end of the year.
POWER CRISIS
Multi-Trex, which started production in 2005, operated at about 70 percent of its capacity until this month's upgrade due largely to a power crisis that has all but hobbled industry in Africa's top oil producer.
"Each time we had a problem or needed to service the generators, we had to shut down for days, this affected our capacity utilisation," Isiaka said.
Part of the cash from the private placement would be used to help ease the power problems at the plant, which processes cocoa into butter, cake, powder and liquor for export mainly to Europe.
Multi-Trex also plans to convert solids to consumer products for markets in Asia, the United States, South Africa and West Africa, and to produce its own brands of cocoa beverages. The plant is located near the commercial city of Lagos.
Nigeria, the world's number four cocoa grower, launched an ambitious cocoa revival programme three years ago to boost output, local processing and consumption, but incentives from the government often come late.
"Government incentives, whether physical or monetary, have not been timely, so we have had to borrow at a high cost from time to time," Isiaka said.
Nigeria's installed grinding capacity stands at about 100,000 tonnes a year. Around 40 percent of this is working, processing roughly 25 percent of national cocoa output. Some moribund plants are being revamped and local processing is seen climbing rapidly over the next year.