Shareholders of the Cocoa Processing Company Limited (CPC) have kicked against attempts by the company to venture into the national School Feeding Programme (SFP).
The shareholders of the ailing company took that stance when the chairman of the board of the company, Mr Jacob S. Arthur, gave a hint that CPC was in serious discussions with the Ministry of Local Government and Rural Development for the introduction of cocoa drinks into the SFP.
Making their views known at the Annual General Meeting (AGM) of the company in Accra on July 30, the shareholders argued that the SFP programme was heavily cash-strapped and, therefore, service providers were not being paid on a regular basis.
They, therefore, warned that any such attempt by the CPC to provide chocolate drinks to the SFP would worsen the already bad financial situation of the company.
The shareholders rather asked the CPC to concentrate on partnering with the hotels in the country to serve cocoa drinks during programmes and also approach government institutions to serve cocoa during conferences.
In his response, Mr Arthur assured the shareholders that the idea had not been consummated but was still at the discussion stage, with so many issues yet to be thrashed out.
“If it is not in the board’s interest, then we will not step an inch towards it,” he stated.
Operational challenges
Mr Arthur also explained that the company faced a number of challenges which included the unpredictable electricity supply situation, coupled with interruptions in water supply. He added that the company had to shut down operations intermittently as a result of these challenges.
He also pointed out that the company had challenges with plant and machinery availability as a result of electrical and mechanical faults which led to a considerable production downtime.
“As a consequence of these challenges, the company once again could not achieve its production target. The cocoa factories processed a total of 20,979.406 tonnes (mt) as against the target of 30,000mt for the 2012/2013 year,” he said.
How to resolve the challenges
Mr Arthur said the board had put in place measures to resolve the operational challenges as the company had invested in alternative sources of water in order to free its operations from interruptions in water supply from the Ghana Water Company.
He said as part of the project, a Reverse Osmosis (R.O) plant was ordered to purify the water for plant usage.
Financial constraints
The Chairman said the CPC gets just around five per cent of its export revenue for its total operations.
He said the balance of 95 per cent was shared between COCOBOD who supplies the company with the cocoa beans and the syndicated banks as payment on account of the outstanding loan facilities.
“Thus our recovery has been slow and painstaking as there is very little cash available to take advantage of economic opportunities,” he stated.
He said in view of the financial results obtained, the board could not recommend the payment of dividend to shareholders.
Future outlook
Mr Arthur, however, said the future outlook of the company was bright, as COCOBOD was assisting it to free itself of the stranglehold of indebtedness to financial institutions to pave the way for increased supply of light crop beans to enable the company achieve the 70 per cent throughout production.
He said preparations were also underway to break into the West Africa sub-regional market, with arrangements almost complete to commence from the Nigerian market.
He also pointed out that investors who showed interest in partnering CPC in its operations but suspended their considerations in 2013 because of the election petition had started making enquiries.
“It is hoped that these enquiries will be fruitful now that the political challenges have been resolved,” he added.