The manufacturer, which produces chocolate products for clients such as Nestlé and Hershey is striking a $950m deal, for the cocoa arm of Petra Foods in a move which will make it the world’s biggest processor of cocoa.
The swiss firm is reported by Reuters to be looking to reduce its dependence on West African beans. The deal will add a second strong base for cocoa sourcing and processing in Asia with the supply of beans from Indonesia a particular draw as the group looks to mitigate the effects of further conflict in West Africa.
Over 70% of the world’s cocoa is supplied from the region, however political and military events, particularly in countries like Ivory Coast, have consistently disrupted the supply of cocoa and accounted for several price spikes over the past few years. Though analysts told Reuters that they thought the chocolate maker was paying over the odds for the Singaporean business, the move to develop an emerging markets presence and diversify the sourcing capabilities could yet justify the price.
Barry Callebaut said the deal is expected to close mid-2013 and will boost sales volume in fast-growing Asia and Latin America to 31% of total sales volume from 24% now.
