NANA AGYENIM BOATENG PRESENTS CPC: THE LEADING PROCESSOR OF PREMIUM GHANA COCOA BEANS
Interview with Nana Agyenim Boateng, Managing Director at Cocoa Processing Company
At Cocoa Processing Company, you do a lot of products from chocolate bars, chocolate spread, chocolate drink, chocolate couverture, semi-finished products, etc. How do you stand out, not only in Ghana, but in West Africa and the world? How do you differentiate yourself and what is your competitive advantage?
The single origin country bean is a competitive advantage because Cocoa Processing Company is the only processor of single origin in Ghana. Our vision and mission are to ensure process quality and healthy products. Looking at the way our cocoa bean in Ghana goes through the processes, over the five day fermentation, a seven day sun dry, it is implicit that it gives it an organic form. The fermentation process is what adds on to make it and that is the same with wine, etc. When you get into the five days of fermentation, you are building up the flavonoids on a 15 molecule system. That means it helps you to stand the test of time. Then, moving it on to the sun dry gives every quality which maintained the flavonoids and that is what gets you into the polyphenols. In that case, it goes to cement the purpose and qualities and values of what you get in consuming cocoa or chocolate. That is what makes us stand out since anyone would want to buy the butter to blend with the rest. Even some of the local processors blend with what they get from Ecuador, Indonesia, etc.
Everybody knows that you produce single origin cocoa beans. Is it something that is valued and that can get a higher margin on the market?
The higher marginal rate always comes from the bean and that is why Ghana qualifies for the premium. But when it comes to the products, invariably, you cannot be taxed twice. Already that bean is on a premium which has been first given to the farmer. When it comes here it is for processing and the market. Anyone who sees the Portem brand knows that this is from CPC.
What is your international reach? How much do you export and to where?
The majority is to Europe with some to USA and African markets.
Where are your clients?
You cannot have one single client because our processers register under the FCC (Federation of Cocoa Commerce) which means you can trade anywhere. It is not limited to a few people. So long as he is registered on the FCC and is a player, he can then deal with you on an LC basis. That is indicative of what discussions we are going into. I prefer going into countries where you have that large number of FCC members.
Are you looking for investors?
That single origin country bean is a competitive advantage because Cocoa Processing Company is the only processor of single origin in Ghana. Our vision and mission are to ensure process quality and healthy products.
CPC is situated on 37 acres of land with three factories in one. Each factory was built at a different time. The first factory for the processing of semi-finished was by the first President. We added a second factory that is 34,000. Then, we have the confectionery factory which is 3,000 capacity. Presently, because of the time and age, some machines need to be retooled and replaced. We are always given support by President Nana Akufo-Addo and his vision of Ghana and through the sector minister. We are now in contact with some financiers to increase, retool, and replace our machines to 90,000 tons for the processing and also 15,000 for the confectionery. We started adding some initial kicks of a stimulus package of $3 million where we want to add on to the confectionery and that side also is where we are coming on to the cocoa. In the next few years, we will be on that line. But we are not yet close with that because we will need working capital to support the cocoa bean supply and a collateral management program. Presently, we are in discussions with a bank but we have not closed that deal yet. So, other investors are welcome.
What are the current projects that you are working on?
We want to achieve formatting and sizes of our products. Also, with our chocolate spread, we want to do these small forms for the hotels and similar places. Currently, it is a 500. So, these machines are to break it down to the 20, 50, 100, etc. Also, with our products in the hot chocolate, Royale, if you have a 400 gram package, much as the packaging is beautiful, how many people will be carrying it on up there? People want something like this in a sachet form of 40 grams. So, these are the machineries that we are bringing so that we can reduce them into these sachets so it can be 20 grams or one mil at a time. Presently, also, we are doing the school feeding program for the high schools. This support is also to allow us to increase the tonnage of hot chocolate. If we have it in this 500 gram for the spread, much as everybody would love it, they want it in small sizes, which at one mil can just be for the table. So basically, these are the first investments of the $3 million. But really, what we need to do now with the support of the government is the retooling and replacement of some of these aged parts and also working capital to buy beans on our own.
What are the major success stories that you have achieved?
CPC has been established since the President First Republic and we listed on the stock exchange in 2003. In 1997, the Ghana Cocoa Marketing Board restructured to the Ghana Cocoa Board (Cocobod). All these processes also came up into the liberalization of the internal market. In 17/18 we all had to move with the President on the value addition to look at 2021 to do 50% of the 21/22 season. So, in 17/18, for the first time in the history of this company, we were able to produce 25,084 of cocoa with a turnover of $28.2 million. The following year, we processed 44% of our capacity of 28,064 and then increased our turnover 28.3. Here, we reduced our finances from $10 million to $4 million. In 2019/20, we targeted to do 32,250, which would have been 50% of our market share. We got hit in between the month of April after the second quarter when the pandemic spread and then there was no need for chocolate or cocoa butter or powder because the whole world was shut down. But now, it is picking up and we hope that we will still be there. It was our target to be moving from 39 to 44 to 50. Now, the world is opening up, so we need to open up. We introduced additional and new products to the market and did some repackaging. We also want to get into the African market. In our internal consumption as a country, we have been able to increase the per capita consumption from .50 as of 2017 to .56 now. This is all part of trying to impress on the local content on the good values of cocoa consumption and also projecting the same outside. For instance, we have artisanal chocolates which we have put in the form of nuts. We have macadamia, pistachio, almond, coconut, pecan, and walnut. I can match it with any products in Europe. We also customize our products. We customize for weddings. One was done by the police administration when they wanted to increase awareness of COVID and they gave our chocolates out as part of the promo. On the dark chocolate, we have 70, 80, 90. These packages can all meet any standard anywhere. We come through with product packaging and quality content and that is where a customer will choose us. This is why we want to expand because if you look at the artisanal chocolates, we have 2000 chocolatiers with a revenue base of over $12 billion. We are able to create the market and the enabling environment. We also do a gift pack which gives all that variant of our product like lemon, dark chocolate, coffee, orange, etc. It comes in a nice package which you can give to anybody. These are all things which we are trying to bring on board to add on to our product development.
What is your vision? How do you see the development of CPC in the medium term? What do you want to achieve?
Presently, some of our challenges are in respect to utility and increased production. Currently, because of some of our ageing machines, we are not producing to expectations. Retooling and replacement of some of these parts is to work in the vision of the President in the value addition with both the confectionery and the semi-finished. This value chain is where all together, the farmer, the transporter, the stakeholder get profit. In the next three to four years, we will be looking at that in a semi-finished level. We will also then call for the utilities. These products come with a roasting system and the chillers and boilers also cause huge costs. What we have started to do now is to use the cocoa pod and the cocoa shells as a biomass combined heat power. We use that to generate our own electricity and wean ourselves from the electricity. That will also be a huge cost savings and will reduce our operation cost by 60%. It uses a lot of water for this steaming and roasting. In the future, as much as possible, we want to do geological surveys to identify the hot spots here so we can sink more boreholes to reduce our water. As much as possible, we want to create awareness of local content and consumption. Whatever is used to export these products, the government will then have some leeway saving this money for other activities and not for just importing the same product. This will only come when we, as a major player, match whatever is coming in content and package.
What is your inspiration? What drives you to do what you do?
In life, as a human, one thing that you strive for is to create an empire for yourself. I am a traditional ruler in that I am a chief in the Ashanti region and a public servant. Managing people is the same as managing in my location or my county or my province. What is the imprint that you are leaving for people? The social covenant is what determines everyone. Getting assigned as a public servant, your social covenant will be the covenant between you and your boss and your boss, in this case, is the President. So, you create an empire, you leave that mark, and everybody can talk about it. Everywhere that I have worked in my life to now, I have tried to do as my philosophy to leave an image and a good impression, an indelible mark which is very difficult for anybody to cross out. People want to emulate it, and follow it, and then make you a mentor and role model.
ABOUT COCOA PROCESSING COMPANY: Cocoa Processing Company is based in Tema and was established in 1965. The company comprises two cocoa factories and a confectionery factory. CPC processes raw cocoa beans into a variety of products, including chocolate bars, chocolate dragee, chocolate spread, drinking chocolate, chocolate couverture and semi-finished products. CPC prides itself in using single origin cocoa beans and its factories process only the choicest premium Ghana cocoa beans without any blending.
For more information, please visit: www.goldentreeghana.com.
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