Cocoa price shoots to the roof from USD2000++ in 2023 to as high as USD12000 and trading at USD7500 to 8200 as at now. Weather is unpredictable BUT cocoa farming is a concern e.g aging trees, deforestation laws, government price control, and rising chocolate consumption in China and India and effect on La Nina. I think GCB saw this coming and acquire grinding companies in other countries e.g. Indonesia, Ivory Coast, US and Germany. GCB is Asia’s largest cocoa processor and the world’s fourth-largest by capacity, with annual grinding volumes exceeding 450,000 metric tons. They are expanding their grinding facilities e.g. Ivory Coast Phase2 & Schokinag’s. Their lower profit attributes to the hedges losses-unrealized loss on forward contracts and finance cost 67% YoY due to working capital needs for bean procurement.
Keep our finger cross.

There is news that Ivory Coast aims for 50% local cocoa processing within 2 years. Ghana/Ivory Coast has this Government Price Controls in place (This is like OPEC & US Strategic Petroleum Reserves). Guan Chong Berhad (GCB) has actively pursued initiatives to capitalize on this.
1 GCB’s Singapore subsidiary acquired a 25% stake in Transcao Côte d’Ivoire (Transcao CI) for €28.08 million (RM130.1 million), partnering with the Ivorian Coffee and Cocoa Council (CCC) to boost local processing. Transcao CI operates a 50,000-ton plant, with a second facility (total capacity: 190,000 tons) planned by end-2024.
2 San Pedro Plant: Inaugurated in 2023 with 60,000-ton capacity, set to scale to 240,000 tons across four phases.
3 Abidjan Plant: Partnered with CCC to inaugurate a 50,000-ton facility (scalable to 110,000 tons), featuring the world’s largest single-site cocoa storage (150,000 tons).

GCB is a key player in Ivory Coast’s 50% processing target, combining local partnerships, infrastructure investments, and global market access.
We see GCB’s Ivorian ventures signal their initiatives to reduced bean procurement costs and revenue diversification (value-added exports).

Prospect looks good. Cocoa future price rebounds and trading at previous low USD7,200 to USD 8,200 and as at today, USD 8,440.

There is no indication anywhere GCB get loans from foreign banks or institutions. All indications show GCB rely primarily on Malaysian financing e.g. Sukuk Wakalah Programme (RM800 million, rated AA-IS by MARC), bank loans (RM3.4 billion in 1H2024, likely from a mix of Malaysian banks and working capital facilities).