The new plant is expected to grow the group's cocoa grinding capacity to 310,000 metric tonnes (MT) per year, compared to 250,000 MT per year currently.
Furthermore, the expansion will place Guan Chong closer to a key raw material source, grant easier access to the key European consumer market, and provide the group significant cost savings.
Group managing director Brandon Tay Hoe Lian said the expansion programme remains in progress despite uncertainties posed by the Covid-19 pandemic, and is supported by resilient and long-term growth in global consumption of cocoa ingredients.
"Despite the moderated demand [for] chocolate currently due to the Covid-19 pandemic, the long-term demand and prospects remain stable. We are therefore confident of our expansions contributing to a stronger footing in the coming years, to be supported by enlarged capacity, expanded sales channels and improved competitiveness.
"While we foresee challenges remaining in the near term, going forward, we will focus on optimising our production process, as well as build our markets through our expansions into Europe and Côte d'Ivoire," he said in a statement today.
On top of that, Guan Chong has also completed the acquisition of Germany-based industrial chocolate manufacturer Schokinag Holding GmbH earlier in January 2020, which will utilise up to 50% of the grinding capacity in the new plant in Côte d'Ivoire once completed.
“The expansion into both Cote D’Ivoire and Germany will provide the group synergistic benefits as it looks to solidify its position as a key player in the global chocolate industry,” Tay added.
At noon market close, shares of Guan Chong were down 1 sen or 0.39% at RM2.58, with 170,500 shares traded.
Source: The Edge Markets