One Year On: Transforming a Global Cocoa Business
By Gerard A. Manley, Managing Director & CEO, Olam Cocoa
Just over a year ago we announced the formation of a new, expanded and transformed Olam Cocoa. Having worked in cocoa for more than 32 years, I was very proud to finally see two world-class cocoa operations unite as a single business.
The strategic rationale for putting these two businesses together was that it allowed our Cocoa platform – which is one of the prioritised businesses for the Olam Group – to become a focused and fully integrated global market leader for the supply of cocoa beans and cocoa products.
Significantly, the expanded business leverages the complementary components of each of the previously separate companies. Olam was already the world’s largest originator and trader of cocoa beans and maintained the most extensive footprint in terms of farm gate origination presence across all of the key cocoa producing countries. In addition, we also had a well-established proprietary and fundamental research resource framework in place that provided us with exceptional cocoa market insights. Alongside our world-class strategic trading and risk management skills, through the acquisition we secured extensive manufacturing capabilities for the processing of cocoa into cocoa products – cocoa powder, cocoa liquor and cocoa butter – as well as expert cocoa product development and innovation infrastructure.
The cocoa processing asset portfolio we acquired allows for roughly 600,000 metric tonnes (MT) of processing capability in eight factories across North America, South America, Europe, Africa and Asia, and it added 10 warehouses, two usines, four innovation centres and 16 sales offices to our operations. Combined with our existing processing facilities, our total capacity increased to 700,000 MT. Now, as a combined entity, Olam Cocoa procures 950,000 MT of cocoa beans or just over 20% of the total global production, with the vast majority from our own origination business. We source cocoa beans to supply our own factories and to support new and existing customers, including the world’s leading international chocolate brands. Current and projected global demand will need to be met by increased supply, which creates a situation where we believe we will be able to keep growing our origination volume and value.
Alongside our global, premium brand deZaan, with its heritage of more than 100 years, our cocoa product brand family now includes Pan-African origin brand Unicao, 70-year-old Brazilian brand Joanes, well-established cocoa powder brand Macao, and specialty fats brand Britannia. In 2017 we will also be launching a new cocoa powder brand, Huysman, in North America and APAC to support growing demand in those regions.
Olam Cocoa remains a leader in providing sustainable cocoa. Not only are sustainable supply chains the socially responsible way to...