CI VIEW: Cote D’Ivoire seeks to further diversify dependence on cocoa; PM and Trade Minister say UPDATE

 

WASHINGTON/MILAN (CI Africa) – (Update to add interview with Ferrero Chairman Amb. Francesco Paolo Fulci on October 12, 2015) Cote D’Ivoire, the Western African nation, is seeking to build on its success of diversifying its economy from cocoa production and dependence on major chocolate producers, Cote D’Ivoire Prime Minister Daniel Kablan Duncan and Trade and SME Minister Jean-Louis Billon.

[Cote’d Ivoire Prime Minister Daniel Kablan Duncan and Trade and SME Minister Jean Louis Billon interviewed by Capitol Intelligence using CI Glass during the US-Africa Leaders Summit in DC, August 7, 2014]

Speaking at the Cote D’Ivoire Embassy in Washington, Prime Minister Duncan said the once war-torn Cote D’Ivoire is already one of the top ten countries in the world in terms of economic growth.

He said the country is no longer solely dependent on cocoa production despite being the world’s largest producer with some 35% of global production.

Speaking with Capitol Intelligence during a meeting at the US Chamber of Commerce on April 17 2015, Prime Minister Duncan said that the country is in talks to increase the amount of locally processed cocoa from current levels of 33 percent to 60 percent.

Prime Minister Duncan, who was in Washington DC for the IMF World Bank Annual Spring Meeting, said his goal in his talks with major cocoa processors was to raise the valued-added chain for investment in his fast growing economy.

[Cote d’Ivoire speaks with Capitol Intelligence/CI Africa using Google Glass at US Chamber of Commerce on sidelines on IMF World Bank Spring in Washington, DC. April 16. 2015. PM Duncan was with US Chamber of Commerce Vice President for Africa, Scott Eisner.]

The government of Cote D’Ivoire is currently holding talks with major food groups such as Chicago-based Archer Daniel Midlands (NYSE:ADM) and privately-held Wayzata, Minnesota-based Cargill.

In fact, Cote d’Ivoire has been in recent years taking steps to offset the dominant position that large chocolate groups such as Nestle SA (SWX: NESN); Hershey, PA-based The Hershey Company (NYSE:HSY); and the privately-held Mars, Incorporated and Asti, Italy-based Ferrero has over the Cote D’Ivoire economy.

In fact, the privately-held Ferrero family-owned chocolate group is unique in its ability to combine corporate responsibility with a for-profit mentality, Ferrero chairman Amb. Francesco Paolo Fulci said in an interview with Capitol Intelligence at the Milan Universal Exposition in Milan.

[Ferrero SpA Chairman Ambassador Francesco Paolo Fulci speaks to Capitol Intelligence/CI Africa using CI Glass at Milan Universal Exposition. October 12, 2015]

Ferrero, unlike other chocolate giants such as Mclean, Virginia-based Mars or Vevey, Switzerland-based Nestle, does not allow itself to be “shaken down” by western non-governmental organizations, sources close to Ferrero said.

“Every week we get some message from an American or European NGO trying to get money for us to help the poor Africans but in fact the money would be used to pay their salaries,” a Ferrero source said.  “It is extortion plain and simple. Everything we do is directed by ourselves without these middlemen.”

The company, which is based where Pope Francis parents were born, also does direct charity work in Africa through the Salesian Society of the Catholic Church.

[Mars, Inc headquarters at 6885 Elm Street in McLean, Virginia filmed by Capitol Intelligence/CI Africa on September 26, 2017. Mars, Inc is even more secretive than the nearby headquarters of the Central Intelligence Agency in Langley, Virginia]

The only other chocolate group similar to Ferrero is The Hershey Company founded by Milton Hershey.  Milton Hershey, who did not have a heir, decided to permanently gift all profits from the The Hershey Company to the Milton Hershey School that he founded in 1909 to educated orphans and disadvantaged children.

Hershey independent board member, former Pennsylvania Governor and Homeland Security Secretary Tom Ridge, said the company could look at Hershey’s past experience in pre-Casto Cuba and takeover cocoa production, build in country logistic along with founding institution such as Milton Hershey School in places such as Cote D’Ivoire, Cameroon and even Haiti.

[Former Homeland Security Secretary and Hershey board member Tom Ridge speaks with Capitol Intelligence using Google Glass at Forum Ambrosetti in Cernobbio, Italy on September 5, 2014]

“The chocolate barons in the past called all the shots in Cote D’Ivoire and the only investments they made out of the sector was to NGOs (non-government organizations),” a senior banker at the African Development Bank (AfDB), said. “Now we are seeing growth in all sectors in Cote D’Ivoire and the African Developments bank move to Abidjan from Tunis will only greatly improve the positive trends.”

Cote D’Ivoire may find unexpected support for its efforts to upgrade it cocoa industry and at the same time attract new foreign investors from the South American nation of Colombia.

While Colombia only produces only 50,000 tons out of worldwide production of 4mln tons, Colombia is the South American leader in value-added production, Federacion Nacional de Cocateros President Eduard Baquero Lopez said.

Lopez said said that about 25 percent of world cocoa production is generated in South America and the Caribbean, with the largest producer being Colombia’s politically and economically backwards neighbor, Ecuador — with an annual production of 400,000 tons.

Colombia, Haiti and the Dominican Republic specialize in marketing their cocoa production and end products on the higher-end organic/fine chocolate markets.  One company selling high-end chocolate is Bogota-based Lok Foods whose owner Maria Carolina Angulo represented the company during a Colombia Pavilion forum on Colombia cocoa production and chocolate manufacturers.

[Lök Foods owner Maria Carolina Angulo speaks with Capitol Intelligence/CI Africa at Colombia Pavilion during Milan Universal Exposition. Milan, Italy, June 23, 2015.] 

Colombia — which has transformed itself from a narco state to a vibrant economy with sophisticated industry and financial services — can offer a country such as Cote D’Ivoire hands on experience in upgrading a fast growing post-conflict economy, the director of the Colombia Pavilion at the Milan Universal Exposition, Paula Dout Corredor, said.

One group that could help Cote D’Ivoire’s efforts to keep the cocoa production value chain in Cote D’Ivoire is Sonson, Colombia-based conglomerate Grupo Nustresa (formerly Compania Nacional de Chocolates SA) with its annual sales of USD 5.6bn.

It is also understood that the World Bank has started a discussions with African commodity producing countries to explore the possibility of countries such as Cote D’Ivoire to begin hedging future output on world commodity exchanges such as the Chicago Mercantile Exchange (CME), Intercontinental Exchange (ICE), Deutsche Boerse Eurex and NYSE Euronext.

While talk at the World Bank is at a nascent stage, experts say that such a program would no doubt involve the International Monetary Fund (IMF) and the African Development Bank in an advisory and coordination capacity.

The African Development Bank has already relocated back to its original headquarters in Abidjan and has already moved key staff from Tunis. The move, according the Trade Minister Billon, is normal as Tunis was always to be a temporary home for the bank.

Regarding the replacement of the AfDB in Tunis, there is already high-level talk in Washington, DC between the White House and Congress to call for the transfer of the extremely wasteful and highly inefficient Food and Agriculture Organisation (FAO) from Rome to the former breadbasket of the world, Tunisia.

Cote d’Ivoire is looking for foreign direct investment in all sectors of the economy, including real estate, trade, services and industry, Minister Billon said. Billon is a scion of the country’s leading agribusiness group SIFCA and is credited by observers of bringing private sector results to the Cote D’Ivoire.

By PK Semler in Washington, DC and Milan Italy; additional reporting by Aleksander Nowacki in Tunis.

For more information, please call +1-202-549-3399 or email pks@capitolintelgroup.com

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