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New ADM cocoa plant to meet growing demand

17-Oct-2008
Last updated on 20-Oct-2008 at 16:31 GMT2008-10-20T16:31:39Z

ADM has this week opened its new cocoa processing plant in Hazleton, Pennsylvania, a project it began in 2006 in a bid to expand and cater to growing demand for cocoa and chocolate materials from manufacturers.

The agrifoods giant entered the cocoa market in 1997, when it acquired the global cocoa processing assets of Grace Cocoa and ED & F Man. It now claims to grind some 15 per cent of the world’s cocoa. According to the International Cocoa Organization, world production of cocoa for the current year (2007/8) is expected to be around 3.7 million tonnes.

World grindings – the usual measure for consumption – were put at 3.7 m tonnes in 2007/2008, but are expected to rise to 4.3 m tonnes in 2012/2013. This indicates little slack in supply/demand – and a burgeoning market for the new addition to tap into with its chocolates, cocoa liquor, cocoa bitter and cocoa powder.

Described as the “newest and most technically advanced” cocoa processing plant by VP cocoa and milling Mark Bemis, it brings bulk to ADM’s east coast operations.

There are five other plants in North America – in Milwaukee, WI, Mansfield, MA, Glassboro, NJ, Georgetown, ONT, and Mississauga, ONT – and another seven worldwide. (Another is under construction in Ghana).

Local investment

ADM has said it chose the 74 acre Hazelton site for the 500,000 square foot facility because of its proximity to the East Coast customer base and inbound raw-material supplies.

There is also a “strong local transportation infrastructure”, and “availability of skilled workforce”.

Indeed, when the plant is running at full capacity by fall 2009, more than 200 skilled workers will be employed there.

The company was assisted in funding the project by a US$4.6m grant from Pennsylvania’s Department of Community and Economic Development, including $925,000 as an opportunity grant, $2.5m in infrastructure development funding, $1.05m in job creation tax credits, and $100,000 in job training assistance.

Ghana plan

ADM announced the building of its other new cocoa plant, in Ghana, in June 2007.

Bemis explained that move as part of a plan to expand processing operations to provide cocoa products from a single source.

"This investment demonstrates ADM's commitment to expand our premier position in the agricultural processing value chain," said Bemis. "Our strategy includes the geographic expansion of our food processing and distribution network."

Bemis said the company is committed to providing local jobs in the Ghanian community.

In the last full financial year ADM reported operating profits of $217m for its wheat, cocoa and malt operations, up from $209m the previous year.

This article has been updated from the original version, which erroneously stated that ADM entered the cocoa market in 2007. In fact, it entered it in 1997.

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