June 22, 2018 / 6:59 PM / a year ago

UPDATE 1-Ivory Coast aims to grind 1 million tonnes of cocoa beans by 2022

(Adds details, quotes and background)

By Ange Aboa

YAMOUSSOUKRO, Ivory Coast, June 22 (Reuters) - Top cocoa producer Ivory Coast could grind 50 percent of its current output locally by 2022, boosted by fiscal measures and incentives given to companies in the sector, the deputy head of the Coffee Cocoa Council (CCC) marketing board said on Friday.

"Yes, it is possible to hit 1 million tonnes by 2020-2022 because of the fiscal advantages the government has given to companies to help them invest massively, and that is what is happening," CCC deputy head Yao N'goran told Reuters.

Ivory Coast has an installed grinding capacity of 712,000 tonnes. Increasing that capacity and new grinding units will enable it to reach the target within the next four years, N'goran said.

The government agreed a convention with multinational companies in the sector including Cargill, Olam and Barry Callebaut in 2017, in which the companies agreed to increase their bean grinding by 7.5 percent each, so as to benefit from the government incentives.

Mariam Kone, executive secretary of the GEPEX, a lobby representing multinational cocoa exporters and grinders, said nearly all companies had signed the convention.

Kone added that for the target to be reached, it was necessary for the government to give additional incentives.

"The Cocoa Coffee Council had promised to pay back our excess electricity costs after power prices were increased inconsiderately a few years ago, so far, we are still waiting for it," Kone said.

According Ivorian cocoa grinders, energy costs, the cost of importing machinery, and getting qualified plant maintenance specialists, are factors that make local grinding less attractive compared with options outside Ivory Coast.

"I think it can be done by 2022, but we will need more tax and other incentives," Loic Biardeau, Barry Callebaut managing director in Ivory Coast, told Reuters.

"The cost of energy remains a negative factor compared with western countries, so there are efforts to be made on that side," he said. (Reporting by Ange Aboa; Writing by Bate Felix; Editing by Elaine Hardcastle and Mark Potter)

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