GREATER COCOA DEMAND SEEN
Guan Chong CEO hoping for more incentives and R&D allocation from government
GUAN Chong Bhd, one of the largest cocoa processors in Southeast Asia, expects an increase in demand for cocoa in upcoming years.
This will be buoyed by investments from multinational corporations in Malaysia, such as Swiss giant Nestle SA’s plan to build the largest Milo factory in the world in Negri Sembilan and The Hershey Company’s new confectionery plant in Johor.
Guan Chong managing director and chief executive officer Brandon Tay said similar future investments would support an estimated RM10 billion worth of downstream cocoa products in the country.
“Meeting such a sizeable market requires more participation not only from farmers but also from vast supporting industries. This will, in turn, generate more skilled job opportunities and excellent business opportunities,” he told NST Business.
Guan Chong has a total annual grinding capacity of 250,000 tonnes. Of that, 130,000 tonnes are produced in Pasir Gudang, Johor and the rest in Batam, Indonesia.
On the company’s 2019 Budget wishlist, Tay hopes it will offer more incentives to encourage cocoa farming and manufacturing.
“We hope to see more incentives to encourage the development of cocoa farming and manufacturing in the country.”
He said Malaysia’s climate was suitable for cocoa farming.
The country was once among the top three producers of cocoa beans in the world. But now, it only produces about 3,000 tonnes of beans a year compared with more than 250,000 tonnes in 1996.
Tay also hopes for more allocation for research and development (R&D) in downstream manufacturing of cocoa products.
“With global demand for chocolate products on the rise, R&D will lead to improved efficiency and innovation in the manufacturing process, thus allowing local players to better compete on the international stage.”
He said in the interim, substantial imports of cocoa beans were required to satisfy market demand.
“However, there is too much red tape in the process of raw material procurement and exporting cocoa ingredients, which hampers the efficiency of the overall supply chain as well as the manufacturing process.
“In this regard, we would like to see the government taking a more proactive role towards streamlining regulatory requirements, such as licensing and quality certifications, in order to increase efficiency and ease of doing business.
“We urge the government to engage with industry players to develop a comprehensive and sustainable plan to develop Malaysia into a major cocoa hub in Asia,” added Tay.