The St. Vincent Cocoa Company (SVCC) decided to cease operations because it no longer sees local production as “a viable one” in light of their targeted acreage of cocoa cultivation.
The SVCC is a subsidiary of Armajaro Holdings Ltd., which in November 2013 sold its soft commodities trading unit to Ecom Agroindustrial Corp., the world’s second-biggest coffee and third-largest cocoa trader.
SVCC, which was established when the Ralph Gonsalves governemtn signed a 50-year agreement with Armajaro in 2011, had a target of cultivating 5,000 acres of cocoa in St. Vincent and the Grenadines.
“Some persons, from the get go, said that this was very ambitious, taking into consideration that here in St. Vincent and the Grenadine we have some 18,000 acres of land basically left for agriculture,” Minister of Agriculture Saboto Caesar told a press conference on Wednesday.
“That was a big number and over the last four years, they were only able to rehabilitate 50 acres and to plant 200 new acres,” he said.
The company has 200,000 plantlets in nurseries, which will eventually take local cultivation up to 500 acres.
Caesar said the SVCC has been collaborating with several international agencies, which were supportive.
He, however, said that Ruth Maloney, who is responsible for the company’s new ventures, “noted clearly that the 200 acres that they have been able to develop over the past 4 years, and without any signs on the horizon that there is going to be an exponential increase in terms of the acreage, it did not make the St. Vincent and the Grenadine operation a viable one, because they would not be able to reach the economies of scale for them to break even”.
I-Witness News broke the news on Saturday that the SVCC had informed the government that is it ceasing its operations in SVG.
Caesar said the company will transfer its operations to the Ministry of Agriculture and cease operations by the end of August.
“So, when we hear that it is touted that the Cocoa Company has pulled up and left, the Cocoa Company, as it is dealing with the cultivation of cocoa, that is no longer, and the memorandum of agreement, they are in the process of writing for a cancellation of it,” he said.
The minister said SVCC is transferring its nurseries, gene bank, and research over the last four years to the ministry.
The company will keep some of its staff until the end of August so that the transition can be properly managed, Caesar said, adding that the company’s lawyer, Louise Mitchell-Joseph, has said that all the labour issues were taken care of.
He said that in light of the development it is very important to examine the economic viability and sustainability of the cocoa industry going forward.
Fine flavoured cocoa in grown in St. Vincent, which is in extremely high demand, Caesar said, and told reporters that the owners of SVGC has said that once SVG is able to provide the requisite quality and quantity, “it is an option that is left for us to explore”.
He said he has communicated with the Ministry of Agriculture and the cocoa corporative in Grenada to share information and collaborate on technical matters for the advancement of the cocoa industry in St. Vincent.
The market for locally produced cocoa beans is important in assessing the viability of the sector, Caesar said, adding that local demand for chocolate for the making of “cocoa tea” peaks around Christmas and Carnival.
“We are going to provide the requisite incentive for persons who intend to increase their production and productivity,” he said, giving as example persons who want to purchase larger hand mills.
But Caesar admitted that the demand for chocolate stick is expect to take up only a very small portion of the cocoa produced.
He, however, said some persons in SVG have expressed a preference for the commencement of the production of chocolate bars.
The Industry Division and the Ministry of Agriculture will be able to work closely with persons in the private sector to ensure that there is “the requisite incentive framework … to ensure they receive the kind of support that is important in the start-up phase of production,” he said.
The government will explore on behalf of farmers the possibility of exporting to regional and extra-regional markets, Caesar said, adding that Grenada had since 2010 expressed interest in purchasing cocoa for processing.
“So, from a purely marketing standpoint, I think that the markets are good and that we will be able to market our cocoa, and therefore, persons who have established cocoa plantations or cocoa fields, whether it was before Armajaro came or since Armajaro came, I don’t think we have an issue to be unduly worried about…
“In fact, I have always noted that I count this situation as one which must be contextualised as an opportunity missed to partner with an international cocoa distributor and to have them work with you not only at the back end to purchase and market, but, on the front end, to help you to cultivate.
“Whilst we … had that opportunity and it has gone, in terms of the cultivation aspect of it, we have an excellent opportunity to create a home-grown indigenous, multi-faceted in all its dimension, a fledging cocoa industry and subsector,” Caesar said.
He expressed gratitude to Armajaro, Ecom, and St. Vincent Cocoa Company, for having chosen St. Vincent and the Grenadines, saying that because of the partnership cocoa cultivation has increased.