Guan Chong To Invest Further RM50 Million In German Cocoa Factory

The world’s fourth-largest cocoa grinder Guan Chong Berhad plans to invest RM50 million in capital expenditure in the next two years for its Germany plant Schokinag Holding GmbH after its RM138 million takeover this year.

This will bemainly for capacity expansions for the Mannheim-based plant, to catch the recovery in Europe as borders open up in the continent including the growing revenue contribution from the plant.

Schokinag recorded a revenue surge of 21.0% to RM689.2 million in the nine months ended this year compared to RM570.0 million it recorded the previous year. The growth experienced outpaced that of the entire Group for the period under review, as the Group revenue expanded 6.5% to RM2,834.5 million in 9M21 from RM2,661.7 million in 9M20.

CEO Mr. Brandon Tay Hoe Lian added that the better performance even without new capacity put in, is not only a good indication of economic recovery in the European region, but also a reflection of the German team in growing the market share in industrial chocolate in Europe.

The company’s third quarter total revenue increased 18.6% to RM998.1 million from RM841.6 million seen in 3Q20, backed by Germany’s contributions and better overall sales tonnage.

However, the higher freight costs and competitive margins that were committed last year has put pressure on the Group’s bottomline, as the Group registered lower net profit attributed to shareholders of RM34.6 million for the quarter versus RM46.8 million previously.

Commenting on the Group’s prospects, Tay “We are seeing signs of demand for cocoa products and ingredients recovering in tandem with economies reopening and higher vaccination rates worldwide.

The commencement of the Ivory Coast factory mid-2022 will also be timely to capture the growing demand trend.”

The new Ivory Coast grinding facility is slated to start operations in 2Q22, which would increase GCB’s annual grinding capacity by 23.4% to 317,000 metric tonnes (MT) from the 257,000 MT presently. The Group currently has existing grinding facilities in Pasir Gudang (130,000 MT), Batam, Indonesia (120,000 MT), as well as SCHOKINAG (7,000 MT).

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