Guan Chong allots RM120m capex for Cote D’Ivoire plant expansion

PETALING JAYA: Guan Chong Bhd has unveiled a €25 million (RM120.22 million) capital expenditure (capex) in 2020 for the ongoing construction of its new cocoa ingredients plant in Cote D’Ivoire, a West Africa country.

It explained that the allocation is part of its initiative to grow its position in the global markets as a key industry player, in addition to enhancing efficiency and sustainability.

Guan Chong group managing director Brandon Tay Hoe Lian stated that the expansion programme remains in progress despite uncertainties posed by the Covid-19 pandemic, and is supported by resilient and long term growth in global consumption of cocoa ingredients.

“Despite the moderated demand of chocolate currently due to the pandemic, the long-term demand and prospects remain stable. We are therefore confident of our expansions contributing to a stronger footing in the coming years, to be supported by enlarged capacity, expanded sales channels and improved competitiveness,” he said in a statement today.

While the group foresee challenges to remain in the near term, Tay stated that it will focus on optimising its production process, as well as build its markets through expansions into Europe and Cote D’Ivoire, going forward.

The new plant will expand Guan Chong’s grinding capacity to 310,000 metric tonnes (mt) per year from its current capacity of 250,000 mt per year.

Furthermore, the expansion places it closer to a key raw material source as easier access is the key to the European consumer market, as well as providing it with significant cost savings.

It also highlighted that the group has completed the acquisition of Germany-based industrial chocolate manufacturer, Schokinag Holding GmbH in January 2020, which will utilise up to 50% of the grinding capacity in Cote D’Ivoire once completed.

“The expansion into both Cote D’Ivoire and Germany will provide the group synergistic benefits as it looks to solidify its position as a key player in the global chocolate industry,” said Tay.

source https://www.thesundaily.my/business/guan-chong-allots-rm120m-capex-for-cote-d-ivoire-plant-expansion-JL2629847