Abidjan, Oct 8 - Ivory Coast's biggest domestic exporter of cocoa, SAF CACAO, has said it will start producing semi-finished cocoa products for the first time next January.
The West African country is the world's main source of cocoa, but it exports far more raw beans than processed products, an imbalance that SAF CACAO wants to help redress.
"Processing should be decentralised, beans should not be processed in Europe alone," said Amer Adnane, President of SAF CACAO and Director General of Choco Ivoire, in an interview with Reuters late on Monday.
Choco Ivoire, part of SAF CACAO, is spending 13 billion CFA francs ($27.40 million) to open a 35,000-tonne capacity grinding plant in the major shipping terminal of San Pedro in January.
The factory will at first produce cocoa solids, then from the start of 2010 also make cocoa butter.
"We are building a plant to grind 35,000 tonnes of cocoa beans at first, but that will reach 100,000 tonnes by 2010," said Ali Lakiss, Director General of SAF CACAO, who also participated in the interview.
"We are starting the processing of beans into semi-finished products because we want to be an integrated company, but also because it will allow us to diversify our investments," he said.
Worsening bean quality is making it less profitable to be an exporter of the raw product, he added.
Exporters and farmers have repeatedly warned that black pod disease, a moisture-loving fungal infection, is rife among cocoa plantations this year, with some estimating that it will cut the just-opened 2008/09 harvest by up to 8 percent. "Above all we are going to buy fewer beans, because quality is a real problem, and we don't want to take that risk," Lakiss said.
"This year for example, we are not going beyond (buying) 100,000 tonnes because of the quality of the beans. We are going to limit ourselves to 100,000 tonnes of which 35,000 will be processed by Choco Ivoire," he said. "We are going to buy less, and raise quality."
The factory has been pre-built in Germany, and re-assembly on the ground in Ivory Coast is due to begin on Oct. 15.
The firm also intends to build processing plants in Ivory Coast's commercial capital Abidjan, Lakiss said.
SEARCH FOR ADDED VALUE
The move towards greater domestic processing of African goods is not limited to Ivory Coast's cocoa.
African countries have for centuries been sources of raw commodities such as farm products and minerals. But recently states such as Guinea and Democratic Republic of Congo, among others, have said they want to stop exporting basic materials and produce added-value goods that command higher prices.
SAF CACAO bought more than 130,000 tonnes of beans in the 2007/08 season, making it by far Ivory Coast's largest locally-owned exporter.
U.S. giants Cargill and Archer Daniels Midland were the two biggest shippers of Ivorian cocoa.
Ivory Coast produced 1.05 million tonnes of cocoa in the 2007/08 season, but installed grinding capacity was much lower at 384,000 tonnes. This is due to rise by the end of this year, according to figures from the Coffee and Cocoa Bourse (BCC).
The BCC has been placed under the administration of a temporary management committee while the government undertakes broader reforms of the sector.
Cocoa is a cornerstone of the Ivorian economy, contributing around 20 percent of its GDP, but while prices on world markets have hit 28-year highs this year, the industry in Ivroy Coast has been mired in allegations of mismanagement.
Alleged widespread graft in the lucrative industry has become a hot topic in an election year, although a scheduled Nov. 30 poll is likely to be delayed.
President Laurent Gbagbo, who is expcted to stand for re-election, had ordered an anti-corruption crackdown.