New York, April 7 - At the time, it sounded like a good idea to Lion Capital Management Group: rescue America's oldest milk-chocolate plant and bring in cocoa growers from war-torn Ivory Coast as investors.
Three years later, however, the plant remains idle and new investment partners are being sought to revive the plant, Hausmann Banet, president and chief executive of Lion Capital, told Reuters in a recent interview.
Lion Capital has also talked to potential investors from cocoa-growing countries Brazil and Ghana. Cocoa beans are used to make chocolate.
"We gave every benefit of doubt to the Ivory Coast since 2003, and the result is that nothing has been produced today," said Banet.
Built on the cusp of 1900, the former Nestle plant in upstate New York shut its doors in May 2003, forcing about 475 staff out of work.
San Francisco-based Lion Capital, an investment banker and hedge fund company, attempted to rescue the plant by creating a new joint venture. Ivory Coast, the world's top cocoa producer, was brought in as an investor with an investment promise of about $40 million.
Then, a company called New York Chocolate and Confections Co. of Fulton was formed to manufacture cocoa, flake chocolate and cocoa butter at the site in Oswego County. New York State, which backed the proposal because it would generate jobs, offered an incentive package valued at around $13 million.
"So far New York Chocolate has failed to fulfill those issues and, as a result, we have not received any incentive package from the State of New York," Banet said, adding that Lion Capital acquired about two-thirds of the plant's assets from Nestle in September 2003.
Local media reported that Ivory Coast delegates were visiting the plant this week, but so far they have not agreed to make a commitment.
ALTERNATIVES
"We want the plant to continue to make chocolate. As a matter of fact, we are still in contact with the Brazilian delegation and they are willing to provide cocoa beans to the plant and move forward," Banet said.
He said the door was also open for talks with Ghana, the world's second largest cocoa producer behind Ivory Coast. Brazil likewise ranks among the top five cocoa growers.
Making Ivory Coast a partner at the time was considered a good move, despite a civil war in the West African country from 2002 to 2003, Banet said.
Ivory Coast's cocoa output amounts to about 40 percent of the world's cocoa production, though the country is split between the rebel-held north and the government-controlled south amid an at-times tenuous cease-fire.
"But today, I'm waiting to see ... we are starting to think about alternatives to that," he said.
Banet personally spoke with Ivory Coast President Laurent Gbagbo to negotiate the deal in 2003, the Lion CEO said.
"Gbagbo talked to me and he said that he was very happy that we opened the door for the Ivory Coast, for the first time in the history of the country, to own a chocolate factory with an American partner," Banet said.
"But I think they have too many people on their side claiming that they are representing (Ivory Coast). At the end of the day, we don't know who is representing what, and I think that is the key problem," he said.