It was just over a year ago that 3,000 people died in political violence in the Ivory Coast, and the country continues to be rocked by attacks on military forces. Yet there are some positive signs for the economy, both in terms of cocoa and oil, that suggest that if the country can put its political divisions behind it then some growth may be on the way.
Ivory Coast is already the world’s biggest producer of cocoa, yet it looks set to increase the processing of the beans around the port of San Pedro by about 56 percent, to more than 300,000 metric tonnes a year, by 2015. Singapore-based commodity trader Olam International Ltd is opening up a grinding facility in the port, with a capacity of 120,000 tonnes each year, and existing factories are expanding output. The government plans to boost cocoa processing to 50 per cent of its annual crop, and plan to give farmers more money for their beans. These policies were part of the requirement to get $4.4 billion in debt relief from the International Monetary Fund and the World Bank.
“Ivory Coast will no longer satisfy itself with exporting raw commodities,” said Industry Minister Moussa Dosso. “We’re going to boost industrialisation by setting up incentive conditions. After the cocoa sector, from which we want to get more value-added, we’ll focus on the cashew sector.”
San Pedro already has three cocoa-processing plants. Zurich-based Barry Callebaut AG (BARN), the world’s biggest maker of bulk chocolate, has a facility that grinds 145,000 tonnes of cocoa, while the Choco Ivoire factory processes 27,000 tonnes. Ivorian grinder Sucso SA processes 20,000 tonnes. Choco Ivoire and Sucso are also planning to extend their factories, with Choco Ivoire wanting to boost its grinding capacity to 60,000 tonnes within the next two years.
There was also good news for the country in terms of oil, with FTSE 100 oil explorer Tullow Oil striking oil in the deep waters off the country’s coast in June. Tullow announced that its Paon-1X exploration well found “good-quality, light oil”, compensating for disappointing results in April, when a previous exploration well in the area came up dry. Tullow owns a 45 percent stake in the CI-103 licence, with US explorer Anadarko controlling 40 percent and Ivory Coast national oil company Petroci owning the rest.
Morgan Stanley analysts added in a note: “The discovery is the first, meaningful, deepwater Ivory Coast success and de-risks several nearby lookalike prospects, high-potential, 2013 drilling candidates.”