UPDATE 1-CEMOI to boost Ivorian cocoa grinding to 100,000 T

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By Ange Aboa

ABIDJAN, July 19 (Reuters) - French chocolate-maker CEMOI will boost its cocoa grinding capacity in top producer Ivory Coast to 100,000 tonnes by the end of 2012, the company's chief executive said on Thursday.

The company currently grinds around 70,000 tonnes of Ivorian beans a year at facilities in the commercial capital Abidjan.

"By the end of the year, thanks to a 2 billion CFA franc ($3.74 million) investment, the bean-buying capacity of the site ... will reach 100,000 tonnes," Patrick Poirrier told journalists following a meeting with Ivory Coast's Prime Minister Jeannot Kouadio-Ahoussou.

In 2010, Ivory Coast became the world's top cocoa grinder with a capacity of 532,000 tonnes, turned mainly into cocoa butter and powder.

Swiss-based chocolate maker Barry Callebaut is also planning to boost grinding capacity this year.

As part of a sweeping reform of the cocoa sector, the government is aiming to locally grind half of its cocoa bean production by 2015. Currently around 35 percent of beans are processed locally.

However a dispute over a 20-year-old tax break given to grinders, which farmers and some exporters are pushing to have repealed, has put those government targets in danger.

Farmers and exporters estimate the reduction on the DUS ("droit unique de sortie") tax - the main tax on cocoa - costs the government between 35 billion and 40 billion CFA francs annually, money they say should be used to support growers.

Grinder companies have said they may consider moving their operations to neighbouring Ghana.

"I think there have been very negative messages directed against the (grinders), but I think that these messages were clearly orchestrated," Poirrier told Reuters.

"The authorities are well aware of the weight and importance of the cocoa industry in Ivory Coast."

As part of a compromise, the government hired auditing firm PricewaterhouseCoopers to carry out a study and issue recommendations on whether or not the subsidy should be maintained. Its findings have not yet been published.

CEMOI also has plans to launch sales of its chocolate products in Ivory Coast by the end of the year.

"According to our studies and projections, chocolate consumption is going to develop in West Africa in the years to come, and Ivory Coast will be our base for that," said Benjamin Bessi, head of CEMOI's Ivory Coast subsidiary. ($1 = 534.8420 CFA francs) (Editing by Joe Bavier and Anthony Barker)