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Persistent increase in sales volume for world’s fourth largest cocoa grinder Guan Chong Bhd has catalysed the group to double its grinding capacity in the next five years. Picture by Bloomberg.

KUALA LUMPUR: Persistent increase in sales volume for world’s fourth largest cocoa grinder Guan Chong Bhd has catalysed the group to double its grinding capacity in the next five years.

Group managing director and chief executive officer Brandon Tay Hoe Lian said its current 250,000 tonne capacity was already at near-full utilisation rate.

“We are seeing encouraging orders for cocoa ingredients, especially from rising consumer demand in Asian markets,” Tay said in a statement issued after Guan Chong’s annual general meeting in Pasir Gudang, Johor today.

“The positive outlook augurs well not only for the group's performance this year, but also affirms our competitive strengths to supply high quality cocoa ingredients to leading chocolate suppliers and consumer brands, including multinational company (MNC) clientele.”

To ride the growth of demand for chocolate ingredients, Guan Chong is looking to double its annual grinding capacity over the next five years to 500,000 tonnes.

“This certainly will ensure our consistent and timely fulfilment to our clientele, and at same time allow us to grow our presence not just in traditional markets of Americas and Europe, but also high-growth markets in Asia,” Tay said.

Last year, it saw sales volume increase 23.9 per cent, as well as registered a 12.2 per cent cumulative annual growth rate (CAGR) over the last four years since 2014.

The sanguine demand outlook comes on the back of robust global chocolate demand, which is predicted to grow seven per cent annually over the next five years, according to report by Zion Market Research.

Among the key growth markets was Asia, where cocoa grinding activities rose 9.5 per cent in the first quarter of 2019, according to Cocoa Association of Asia.

Guan Chong reported 24.7 per cent higher revenue to RM648.1 million in the first quarter ended March 31 2019 from RM519.7 million previously.

The higher revenue was driven by increased sales volume, which grew 17.6 per cent year-on-year due to stronger orders from customers in Asia Pacific.

Group net profit rose 35.1 per cent to RM53.1 million compared to RM39.3 million, driven by the increased sales volume and better economies of scale.

Guan Chong is confident of delivering a strong performance this year, supported by increased cocoa grinding capacity at its manufacturing plants to meet higher demand from global markets.

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