Nigeria cocoa grinders mull relocation to cut costs

Reuters

4 March 2011

Nigeria cocoa grinders mull relocation to cut costs

* High cost of beans, power outages threatens grinding
* Processors mull relocation to nearby countries
* Lack of government incentives adds to woes
LAGOS, March 4 (Reuters) - The high cost of raw beans and crippling power shortages in Africa's top oil producer may force its cocoa grinders to relocate to neighbouring countries with an easier business climate, an industry association said.

Scores of firms in other industries have already relocated from Nigeria in the last five years citing poor infrastructure, erratic power supply, excessive bureaucracy and multiple taxation among the factors that make business uncompetitive.

Nigeria's cocoa processing capacity has slumped by about 90 percent in the last two years due to these problems and a weak global demand for products, the Cocoa Processors Association of Nigeria (COPAN) said at a news conference late on Thursday.

The world's number four cocoa grower had about 18 grinders crushing over 200,000 tonnes a year in 1986 when the sector was deregulated, but only a few are now partially operational, processing less than 40,000 tonnes.