Cargill boosts chocolate making despite looming global bean deficit
* Cargill to spend $48 million on chocolate plant expansion
* Europe processes 40 pct of the world's cocoa beans
NEW YORK Dec 16 (Reuters) - Cargill, one of the world's top cocoa dealers, is doubling capacity at one of its Belgian chocolate production factories to meet growing demand, the company said on Monday, despite expectations of a global bean deficit.
Cargill will spend $48 million to expand its chocolate making facility in Mouscron, Belgium, over the next two years to meet growing demand in Europe. New production lines are set to be operational in summer 2014, the company said in a release.
The capacity of the Belgian plant, one of two owned by the company there according to its website, was not provided.
Cargill is one of the four so-called "ABCD" companies that dominate the flow of global agricultural commodities and is one of the biggest buyers of cocoa with bean operations spanning Europe, West Africa, Asia, the United States and Brazil.
Europe is by far the biggest cocoa processing and chocolate consuming region, with roughly 40 percent of the world's cocoa grinding taking place in factories there, International Cocoa Organization (ICCO) data showed. Grinding is the processing of beans primarily into butter used to make chocolate bars and powder to make chocolate flavored treats like biscuits.
The Cargill expansion comes as the company has been expected to buy Archer Daniels Midland Co's cocoa business. Both companies already have a significant presence in Europe.
In October, sources familiar with the discussions said Cargill was in the final stages of a deal to buy ADM Cocoa, while anti-trust issues in Europe were widely expected.
The expanded factory will obtain cocoa butter and other raw materials from Cargill's plants in The Netherlands and France, the company said.
The expansion coincides with global cocoa grinding capacity that is well above current needs and cutting into some profit margins.
The over-capacity is further exacerbated by widely expected global cocoa deficits during the current 2012/13 crop year (October/September) and 2013/14 because of lower production and better-than-expected demand. The ICCO upwardly revised its world grindings in 2012/13 to 4.05 million tonnes, a measure of demand, up 2.4 percent above the prior season.
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