RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

KKO plans listing, in drive to rank top in Ivory Coast cocoa

Twitter Linkedin

KKO International unveiled an international public offering, heralding the rare listing of a cocoa producing company, and aimed at raising cash for a drive to become the top cocoa producer in Ivoty Coast.

KKO, which operates through its subsidiary Solea, said that it aimed to raise E10.0m from its share flotation, scheduled for next month, on the French and Belgian Alternext markets.

The cash will go towards realising an ambition to turn Solea into "the largest cocoa plantation in Ivory Coast", the top producing country in the $12bn market for the bean.

The move comes amid a trend toward large-scale plantation agriculture in a cocoa sector traditionally dominated by smallholders.

Solea aims for top rank in Ivory Coast by expanding its area from 1,000 hectares, which 800 hectares are under cultivation, and is aiming to cultivate 3,000 hectares by the end of 2017.

Solea is currently unprofitable, but is aiming to break even on running costs after harvesting begins.

Industry shake-up

Data from the International Cocoa Organisation in 2007 found that 95% of the world's production came from farms of below 3 hectares in size, while larger farms in South America range up to 100 hectares.Array

Initial offering: E10m

(to be increased to a maximum of E11,499,998.82 in the event of exercise of the Extension Option and a maximum of E13,224,998.48 in the event of exercise of the Over- Allotment Option)

Price Range: between E3.26 and E3.98 per share

Listing: Altenerext Brussels and Alternext Paris

Subscription period: September 16 to October 8 2015 (inclusive)

Use of proceeds:

Land acquisition: E5.85m, i.e. E2.35m over the next 12 months, E2.5m in the following 12 months and E1m thereafter.

Staff and equipment: E3.04m, i.e. E1.53m over the next 12 months, E0.81m in the following 12 months and E0.7m thereafter

Structural investments: E0.58m, i.e. E0.38m over the next 12 months, 0.1m in the following 12 months and another 0.1m thereafter.

But a number of large developments are under way, which could drastically change the industry.

In June, United Cacao announced that it is on track to plant 2,000 hectares of cocoa trees in Peru this year, with a long term target of over 5,000 hectares.

According to United Cacao, this would making it the world's biggest cocoa grower by area.

And Tropical Farms Limited, which is owned by London-listed agriculture company Agriterra, is in the process of developing a 3,200 hectare plantation in Sierra Leone.

Tropical Farms Limited aims to plant a total of 4,000 hectares by 2017.

Rising yields

As well as being much larger than the traditional cocoa farm, these new players are looking to maximise yields with a move away from traditional agronomy.

Traditionally, West African growers can hope for around 0.5 tonnes of cocoa beans a hectare, while United Cacao hopes that in Peru yields could reach 2.5 tonnes a hectare.

Solea is even more ambitious, with a yield target of 5.0 tonnes a hectare, thanks to the use of new tree stock, developed by the Ivory Coast National Agriculture Research Centre.

Shorter production times

The company claims the cultivar offers "high average yields with a production timeframe shortened to 18 months from planting time.

"Cultivation of the cocoa bean is perceived as a complex process that still essentially calls on traditional techniques and is restricted to certain climates," said KKO, but added that it believes it can change that perception.

Solea's plantation is equipped with micro-irrigation and fertiliser distribution mechanism.

"This, alongside procedures to monitor tree health and reinforce maintenance, will make it possible to produce beans of a consistent quality throughout the year," the company said.

By Agrimoney.com

Twitter Linkedin
Related Stories

Hedge funds turn net bullish on ags - ahead of price drop to historic low

Speculators are wrong-footed in soymeal, in which they hike bullish bets just before a price tumble. But they fare better in cotton and cocoa

Soft commodities better bets than grains for 2018, says Commerzbank

Indeed, investors are overrating prospects for corn and wheat futures. But cocoa futures have scope for gains, and coffee could see a "price surge"

Agricultural commodity prices poised for gains - particularly in 2019

... FocusEconomics analysis of broker forecasts shows, even as the market negotiates what Bcom terms a "key test" of whether price lows have been set

Evening markets: La Nina fears help ags outperform, for once

... posting small gains, rather than declines seen in other commodities, and shares. But La Nina is not a help for all ag contracts
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069