Cargill building $100 million cocoa facility in Indonesia

CHICAGO Tue May 7, 2013 5:14pm EDT

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CHICAGO May 7 (Reuters) - Agribusiness giant Cargill Inc said on Tuesday it began building a $100 million cocoa processing facility in Indonesia to meet growing demand in Asia for chocolate and other cocoa products.

This plant, which is expected to open by mid-2014, will process about 70,000 tonnes of cocoa beans a year for shipment to Cargill's customers in Asia, where rising incomes have broadened demand for luxury foods and goods. Cargill said products shipped will include cocoa liquor and butter as well as the company's Gerkens brand cocoa powders.

"We have seen a significant growth in demand for cocoa products amongst our customers across the region," Jos de Loor, president of Cargill's Cocoa and Chocolate business, said in a statement.

The facility under construction is in Gresik, in the East-Java region of Indonesia. It will create about 200 jobs in Indonesia and additional positions in Cargill's research centers in Kuala Lumpur, Malaysia, and Beijing, China, the company said.

Cargill, which said it has been buying Indonesian cocoa since 1995, intends to train more than 1,300 Indonesia farmers to improve productivity and bean quality. The company now operates two cocoa buying stations in the country and, once the Gresik facility is operating, will double the quantity of local cocoa beans it purchases.

"We recognize that in order to meet the growing demand from our customers and to support the future of cocoa farming, we must invest in our own operations and in the supply chain," De Loor said.

The expanded operations in Indonesia will complement Cargill's cocoa facilities in Western Europe, Vietnam, Cameroon, Ghana, Côte d'Ivoire, Brazil and the United States, the company said.

Cargill and other members of the Cocoa Sustainability Partnership, which aims to boost cocoa development in Indonesia, met on March 26 to study ways to improve crop farming and yields and lift Indonesia cocoa output to 1.5 million tonnes by 2020, group chairman Ruud Engbers said in April. Engbers also heads Mars Symbioscience Indonesia, a unit of privately owned chocolate giant Mars Inc.

Disease and adverse weather have hampered supplies for years in Indonesia, where small producers own about 95 percent of cocoa plantations and the government is struggling to revive the industry through a $350 million program.

The 22 members of the CSP group, launched in 2006, also include Singapore-based Petra Foods and Olam International Ltd , soft commodity giant Armajaro Trading Ltd, and the Indonesian Cocoa Association.

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