The Cocoa Processing Company has continued to face significant financial difficulties that are impacting the viability of the state-owned enterprise.

In the first half of 2024, the company recorded a loss of $9,568,898, an increase from $9,155,700 in the same period in 2023. This represents a 4.5 percent surge in losses.

The mounting losses at the company have been attributed to escalating operational costs, particularly in selling, distribution, and financial expenses.

The Unaudited Financial Statement of CPC showed a decline in total revenue for the first half of 2024, with figures dropping to $22,198,703 from $24,184,099 in the first half of 2023, representing an 8.2 percent decrease.

The production capacity of the CPC also declined during the period under review, as cocoa beans processed dropped to 2,886 metric tonnes from 6,614 metric tonnes in 2023.

For semi-finished products of packaged cocoa beans, CPC recorded a drop to 2,239 metric tonnes from 5,425 metric tonnes, while packaged confectionery products also decreased to 1,049 metric tonnes from 1,418 metric tonnes.

In view of these significant losses, the CPC Board and management, as part of mitigation measures, have secured a commitment from COCOBOD to continue supplying cocoa beans to meet its operational needs.

Additionally, COCOBOD is not expected to demand payments that could jeopardize CPC’s operations.

Other mitigation measures adopted by CPC include cost-cutting, investing in infrastructure and machinery, and expanding the revenue base.

Meanwhile, the CPC’s management is engaged in talks with the African Export-Import Bank (Afreximbank) to secure an $86.7 million loan facility to support its financial position.

The state-owned enterprise aims to secure an agreement by December 2024 with hopes of a first tranche disbursement by March 2025.

The loan facility is meant to settle the company’s outstanding debt to a syndicate of banks, as well as bolstering working capital requirements, expanding production capacity, and upgrading plant, equipment, and property.

MA/NOQ

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