According to online news reports, initiatives are under way in Cameroon to develop processing of locally produced cocoa and coffee. Currently only one factory, with a capacity of 30,000 tonnes, processes cocoa beans, but in February 2013, the Italian company Imsofer – which produces the Ferrero, Rocher and Kinder brands – announced its plans to build a factory in the south-west of Cameroon with the capacity to process Cameroon’s entire cocoa harvest, as well as a proportion of the coffee and tea harvest. In addition to the creation of around 250 jobs, the company plans to develop village plantations of coffee, cocoa, coconut, sugar cane and tropical fruits, which will be used as inputs for the factory. There have also been reports that the Moroccan firm Compagnie Chérifienne de Chocolaterie is to build a facility with a capacity to process 40,000 tonnes. At present, only 30% of cocoa production is processed locally.
As regards coffee, in May 2013 Nestlé announced a decision to invest FCFA20 billion in a coffee processing factory in Cameroon. Works are scheduled to start in August 2013, with output due to be sold largely on the domestic and regional markets. With a planned processing capacity of 20,000 tonnes, outputs would be equivalent to around half of Cameroon’s domestic consumption.
This investment represents a major expansion: in 2012, locally processed coffee amounted to only 200 tonnes, 0.52% of production.
Sustainability certification processes are in progress for both the coffee and cocoa crops in Cameroon. In February, it was announced that UTZ had completed certification of some 400 cocoa producers. This forms part of a broader programme to ensure full compliance with market requirements in the Netherlands, where a commitment has been made to utilising only cocoa that is certified as sustainably produced, reaching this target by 2020. Currently, the Netherlands is the main importer of Cameroon’s cocoa.
The French Development Agency has also reported that the 16 francophone African member countries of OAPI, the African Intellectual Property Organization, have initiated a process to register ‘Ziama Macenta’ coffee from Guinea as a Protected Geographical Indication (PGI).
Given the efforts taking place in Cameroon’s cocoa and coffee sectors to invest in sustainability certification and local value-added processing, it appears that these sectors are looking to reposition themselves in the light of evolving market trends. This includes both moves towards greater sustainability certification in mature markets and growing consumer demand in emerging markets.
While sustainability certification may yield better prices in the short term, any sustainability price premiums gained are likely to fall as sustainability requirements become more generalised. This may ultimately result in no net benefits being gained by producers, depending on how the costs of attaining sustainability compliance and certification are distributed along the supply chain.
Nestle’s decision to invest in the coffee sector can be seen as indicative of the growing local and regional demand for value-added products in Central Africa, as well as the potential for direct export to other regional markets in Africa and beyond.
It is unclear, however, to what extent recent investment decisions have been influenced by plans announced by the government of Cameroon in June 2012 to introduce an export tax on cocoa beans.
While there may still be uncertainties regarding the prospects for an EU–Central Africa regional EPA, this does not appear to be affecting investment decisions.