The management of the Cocoa Processing Company (CPC) is confident of completing processes to secure a USD86.7 million loan facility with the Africa Export-Import Bank (Afreximbank) by November 2023.
Dr Frank Adu Asante, the Acting Managing Director of CPC, on the sidelines of the company’s Annual General Meetings in Accra, explained that the loan would be used to pay off the firm’s debt, meet working capital needs, retool CPC’s plant and equipment for increased output, and put the company on the path to long-term profitability.
Dr. Asante stated that the company intends to sign the deal with Afreximbank by November 2023 and receive the first tranche of the loan in January 2024. “We’re expecting some good news by November, and we should finish our bit then look up to our major shareholders and the banks to also work on our case,” he said.
Dr. Asante expressed optimism that Afreximbank’s financing would help turn around the company’s fortunes and generate enough profit to pay dividends to shareholders who have not been paid since the company started floating shares 21 years ago. “The local banks are also supporting us with overdrafts and cedis to do the job. We are talking about a million dollars, and we are working with almost all the banks,” he stated.
Despite the company’s challenges, the Acting Managing Director said, “Management remains committed to pursuing growth and profitability in a sustainable manner”.
Mr Kwaku Owusu Baah, Chairman of the Board of Directors of CPC, on his part, indicated that they are concerned about the company’s poor operational performance and are focusing their efforts on ways to improve the situation.
Mr Kwaku Owusu Baah noted that President Akufo-Addo’s intervention resulted in the Ghana Cocoa Board (COCOBOD) converting the company’s debt to equity, which “significantly improved CPC’s balance sheet position. We have since the debt-equity swap, had very fruitful discussions with authorities of Afreximbank and it’s our hope that once the loan facility is approved and the machinery is retooled, CPC’s journey to recovery would be much faster and definite,” Mr Baah said.
Identifying Resources to Retool and Replace Factory Machines
The Board Chairman assured shareholders that in addition to the pursuit of the Afreximbank loan facility, the Board and Management have worked together to identify some resources to retool and replace some of its factory machines.
Other measures to improve the company’s performance, include the operation of a new spread factory, three coarse and fine mills, seven packaging machines, and a six metric tonnes/day conche by the end of 2023.
Mr Kwaku Owusu Baah intimated that there are encouraging signals from Benin and Kenya regarding CPC’s Goldentree confections, which would lead the company to expand into new markets under the African Continental Free Trade Agreement (AfCFTA).
Meanwhile, CPC processed 13,096.875 metric tonnes of cocoa beans in the fiscal year under review, which was lower than the 13,494.883mt produced in the 2020/2021 financial year. The Managing Director, thus, attributed the lower output to the lack of high-yielding and disease-resistant cocoa beans, delays in procuring parts for repairing plant and equipment, and financial constraints.
Despite posting losses in 2022, the company lowered its loss from $15 million in 2021 to $12 million in the 2022 fiscal year, which is also less than the $18 million loss in 2020.
