KUALA LUMPUR: Guan Chong Bhd, one of the largest cocoa processors in Southeast Asia, expects an increase in demand for cocoa in the upcoming years.
This will be buoyed by investments from multinational corporations in Malaysia such as Swiss giant Nestlé SA’s plan to build 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, in addition to growing consumer demand, would support an estimated RM10 billion worth of downstream cocoa products in the country going forward.
“Meeting such a sizeable market requires more participation not only from farmers, but also from vast supporting industries. This would in turn generate more skilled jobs and excellent business opportunities,” Tay said in the company’s 2019 Budget wishlist to NST Business.
Guan Chong has a total annual grinding capacity of 250,000 tonnes, making it joint-fourth largest cocoa ingredients producer in the world.
A total of 130,000 tonnes are produced in Pasir Gudang, Johor while the balance of 120,000 tonnes in Batam, Indonesia.
Tay hopes the 2019 Budget will offer more incentives to encourage the development of 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, he noted, has a suitable climate for cocoa farming and was once among the top three producers of cocoa beans in the world. However, the nation currently only produces about 3,000 tonnes of beans per year compared to more than 250,000 tonnes of beans in 1996.
Tay also hopes for more allocation towards research and development (R&D) in downstream manufacturing of cocoa products in Malaysia.
“With global demand of chocolate products on the rise, increased 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 existing market demand. However, too much red tape was involved in the process of raw material procurement and exporting cocoa ingredients, which in turn hampers the efficiency of the overall supply chain as well as 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 towards developing Malaysia into a major cocoa hub in Asia,” Tay added.