Ebola crisis spurs Nestlé to boost cocoa shipments
The Ebola epidemic in west Africa is spurring food and beverage company Nestlé to speed up cocoa shipments from African countries such as Ivory Coast, the world’s largest producer, said CEO Paul Bulcke.
“If it hits the Ivory Coast, we’re going to have a standstill,” he said.
“We have a system where we fix certain prices for certain times, but not too long because we’re not speculators, but to have stability in our cost.”
Nestlé, the world’s biggest food company, is working to buffer itself against costlier cocoa and sees increasing prices on retail products as a last resort, said Bulcke.
Cocoa has jumped 15% this year, reaching $3 113 (R34 023) a ton this week in New York.
Ivory Coast is bordered to the west by Liberia and Guinea, two of the three countries struck hardest by Ebola. With Sierra Leone, that trio of nations has 9 911 cases of the virus, the World Health Organisation has reported. Almost half of the infections have been fatal.
Nestlé has restricted employee travel to the affected region and said its operations were on high alert.
The company operates in the west African countries of Ivory Coast, Ghana and Nigeria.
Ivory Coast is alone among that group in sharing a land border with one of the nations at the heart of the outbreak. Ivory Coast and Ghana supply about 60% of the world’s cocoa. Bulcke said he did not think the epidemic would spread to areas where Nestlé operated although contingency plans are in place.
Nestlé said it faced a challenging fourth quarter after nine-month sales missed estimates. The maker of KitKat said business in its Asian and African units had become tougher, citing political turmoil and, in Africa, Ebola.