Barry Callebaut now leader of the cocoa-choc pack

Barry Callebaut, the largest maker of bulk chocolate, agreed to buy Singapore-based and listed Petra Foods’ cocoa-ingredients unit for $950-million to expand processing capacity and boost sales in Asia, and thereby becoming the world’s biggest cocoa processor.

It will gain seven factories in countries including Indonesia, Malaysia and Thailand, with combined annual grinding capacity of 405,000 metric tons.

Buying the unit, which already supplies Barry Callebaut, will boost sales in Asia and Latin America by 65 percent, according to the company, as demand for chocolate grows. The acquisition would be the Swiss company’s biggest, according to data compiled by Bloomberg, and follows plans announced this year to build a $16-million chocolate factory in Turkey and expand chocolate moulding capacity in North America.

“Barry Callebaut is securing a No. 1 position in the fast- growing emerging markets, however at a high price,” Jean- Philippe Bertschy, an analyst at Bank Vontobel, wrote in a research note. The “key challenge will be to restore Petra’s profitability.”

Executives at the company said that Barry Callebaut will become the largest buyer of cocoa beans with the takeover.

“This significant transaction will allow us to continue our expansion strategy in all regions and capture additional opportunities through outsourcing and partnership agreements,” chairman, Andreas Jacobs, said.

Cocoa situation

Cocoa demand will exceed production by 101,000 metric tons this season, Macquarie Group estimated in September. Rabobank International predicts a 122,000-ton shortfall. Global output will drop 2.9 percent to 3.85 million tons, led by smaller harvests in Ivory Coast, Ghana, Indonesia and Nigeria, Macquarie said. The four nations produce 74 percent of the world’s beans.

Cocoa prices

Cocoa processing will rise by 3.4 percent in 2012-13 as demand outstrips supply by 83,000 metric tons, according to Rabobank. Prices will average 1,650 pounds ($2,659) a ton in London in the first quarter next year and 1,625 pounds a ton in the following three months, the bank estimates.

Cocoa has climbed 13 percent on ICE Futures U.S. in New York this year, partly on speculation dry weather in West Africa, which accounts for about 70 percent of the world’s supplies, would damage crops in 2012-13.

Source: Bloomberg