05 2nd speaker d liew armajaro group kakao konek - nov 2012

899 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
899
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
29
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

05 2nd speaker d liew armajaro group kakao konek - nov 2012

  1. 1. KAKAO KONEK NOV 2012 DAVAO, PHILIPPINES Daniel Liew Armajaro AsiaThis is the property of Armajaro KL. No distribution or copies of this is allowed without the consent of Armajaro KL. 1
  2. 2. OVERVIEW OF THE ARMAJARO GROUP• Armajaro is a progressive and successful commodities and financial services business, headquartered in London. Founded in 1998, Armajaro has three main business activities :• Commodities – coffee, cocoa, sugar and cotton origination, trading and distribution• Asset management – commodities and other alternative asset investment management• Structured products – arranging and dealing in bespoke financial instruments• Over 1,000 people work for Armajaro and its various subsidiaries and associated companies around the world 2
  3. 3. OVERVIEW OF THE ARMAJARO GROUP• Armajaro is a leading supplier of cocoa beans and cocoa products to international chocolate manufacturing industry• The Group as a whole turnover about 10% of annual world volume• Armajaro has wholly-owned sourcing operations in the world’s key cocoa producing origins including Ivory Coast, Ghana, Indonesia and Nigeria• Armajaro’s associate company, Theobroma produces, trades and distribute semi-finished cocoa products to the confectionery industry• Armajaro is also a leading supplier of green Robusta coffee to the world’s major coffee manufacturers and roasters• Armajaro Trading Limited is headquartered in London with regional marketing, sales and procurement management offices in Kuala Lumpur, New York, Singapore and etc• Armajaro cocoa operations in Asia are based in Malaysia, Singapore, Vietnam and Indonesia. We also sourced cocoa through our agents in PNG, Solomon Islands and Vanuatu 3
  4. 4. INTRODUCTION TO THE ARMAJARO GROUP Agents United Kingdom Netherlands Germany India China Thailand Cocoa Coffee Sugar Theobroma Warehouse Coffee Coffee Sugar Offices Agents Vietnam Cocoa Coffee Sugar Malaysia / USA Singapore Cocoa Cocoa Coffee Coffee Sugar SugarCosta Rica Indonesia Coffee Cocoa CoffeeColombia Coffee Papua New Ecuador Guinea Cocoa Cocoa Agents New Peru Zealand Coffee Sugar Brazil Coffee Sierra Leone Liberia Ivory Coast Ghana Nigeria Cameroon Burundi Uganda Tanzania Kenya Sugar Cocoa Cocoa Cocoa Coffee Cocoa Cotton Cocoa Cotton Cocoa Coffee Coffee Coffee Coffee Agent Agents
  5. 5. ARMAJARO CENTRES – SULAWESI, SUMATRA, JAVA, IRIAN JAYA SIGLI MEDAN PALU JAYAPURA LAMPUNG KOLAKA JAKARTA SURABAYA MAKASSAR PORT OPERATION INTERIOR CENTREThis is the property of Armajaro KL. No distribution or copies of this is allowed without the consent of Armajaro KL. 5
  6. 6. ARMAJARO CENTRES - SULAWESI LAMBUNU KOTA RAYA TINOMBO TOLAI PARIGI PASANGKAYU DONGGALA GIMPU PALOLO POSO PALU BUNTA MASAMBA TENTENA / TOMATA POLMAN PORT OPERATION KOLAKA MAKASSAR INTERIOR CENTRE SP 5This is the property of Armajaro KL. No distribution or copies of this is allowed without the consent of Armajaro KL. 6
  7. 7. ARMAJARO CENTRES - SUMATRA MEDAN KUTACANE SIGLI LHOKSEUMAWE SRI BAWONO PORT OPERATION LAMPUNG PADANG CERMIN INTERIOR CENTREThis is the property of Armajaro KL. No distribution or copies of this is allowed without the consent of Armajaro KL. 7
  8. 8. Current Cocoa Activities in Indonesia – organizational structureEstablished network in Indonesia from farm level to exportThis is the property of Armajaro KL. No distribution or copies of this is allowed without the consent of Armajaro KL. 8
  9. 9. Central SulawesiCapacity : 4.500 mt Southeast Sulawesi Capacity : 1.500 mtSouth SulawesiCapacity : 6.000 mt
  10. 10. Aceh Capacity : 650 mt Medan Capacity : 3.000 mtLampungCapacity : 2.500 mt
  11. 11. Strategic Partner
  12. 12. South Sulawesi - Masamba South Sulawesi - Masamba West Sulawesi - PolmanCentral Sulawesi - Poso Central Sulawesi - KotaRaya SouthEast Sulawesi – SP5
  13. 13. Development and Sustainability (D&S)• Is a dedicated team specializing in Development and Sustainability across cocoa commodity operations in Indonesia• Owning the relationship from farm to brand – “value creation”• Help empowering farmers to improve yields and working conditions
  14. 14. D&S Activities Areas - Nanggroe Aceh Darussalam 2012 East Kalimantan North Riau Island Central Sulawesi Sulawesi North West WestSumatera North Kalimantan Gorontalo Irian Jaya Maluku Bangka Central West Belitung Kalimantan Sulawesi West Sumatera Papua Bengkulu South South East Jakarta Kalimantan Sulawesi Maluku Central Java Lampung South Sulawesi Bali NTT Banten West Java East Java Jokjakarta NTB UTZ Certified Farmers The first UTZ Certified Indonesian cocoa beans
  15. 15. KEY FACTORS INFLUENCING SUPPLY AND DEMANDDemand – stable with upward trend• Chocolate is relatively inexpensive – less affected by periodic economic downturns• No similar substitutes – unlike coffee vs. tea• In longer term, we should see increase consumption due to :• Population growth – more people to consume cocoa products• Usage diversifications into non-edible products – cosmetics, spa etc
  16. 16. KEY FACTORS INFLUENCING SUPPLY AND DEMAND• Change in consumer taste in non traditional chocolate consuming countries – China and India• ICCO 2009 data – annual per capita chocolate consumption• Germany – 11.34kg• United Kingdom – 10.94kg• Denmark – 7.39kg• USA – 5.09kg• Japan – 2.15kg• China – 0.10kg• India – 0.10kg• Just additional 100grams of annual consumption from both China and India would increase world bean demand by 230,000mt
  17. 17. KEY FACTORS INFLUENCING SUPPLY AND DEMAND• Supply – more erratic in short term and slowly declining• Wild weather pattern – prolonged draught and flood• Ageing trees in main producing countries – Ivory Coast, Indonesia• Difficulty in combating cocoa disease – CPB, VSD – in adequate farmers training – financial constraints, attitude• Competition from other crops - oil palm
  18. 18. PROJECTION OF SUPPLY AND DEMAND• Production - violent swings in production cycle – especially 2011/12 season – favorable weather conditions in Ivory Coast – world top producer at 1.3 million mt – also marred by deadly civil war which disrupted cocoa trades, domestically and internationally• Demand – steadily increased despite economic uncertainties since 2008
  19. 19. EMERGING AND POTENTIAL ORIGIN COUNTRIESPhilippines – annual production 6,000mt• Large population – 94 million – potential for work force and market• Large coconut acreage – 2,000,000 hectare ?? – potential for inter-crop with coconut• Already experienced in cocoa
  20. 20. EMERGING AND POTENTIAL ORIGIN COUNTRIESVietnam – annual production - 3,000mt• Large population – 88 million – potential for work force and market• Availability of agricultural land – cocoa acreage only 22,000 hectare – room for more• Good connectivity with international ports – due to coffee and industrial items exports – cheap freight
  21. 21. EMERGING AND POTENTIAL ORIGIN COUNTRIESSouth Pacific Islands• Papua New Guinea – already an established origin – 50,000mt• Solomon Islands – 7,000mt• Vanuatu – 1,500mt• Known for bean quality• Located off major international sea traffic – logistically difficult and expensive• Combined population of these 3 countries only 7.8 million – too small
  22. 22. CURRENT ISSUES IN COCOA• Competition from other crop like oil palm for work force, land and government support• Ageing trees – low yield – but replanting would mean loss of income for farmers - need alternative income in the interim period• Industrialization – lack of interests by the younger generation in agri-business – example – Malaysia !
  23. 23. CURRENT ISSUES IN COCOA• Competition from other cocoa origin – price sensitive grinders would look for best value for money – would learn about and try cocoa from other origins – Ecuador, West African – threat to traditional Asian origin like Indonesia• Increased political / environmental scrutiny – accusation of child labour, deforestation etc
  24. 24. CURRENT ISSUES IN COCOA• Heavy concentration of supply – Ivory Coast and Ghana account for more than 60% of annual world supply – need to diversify – opportunity for other origins• Hot money – funds injection by central banks spill over into commodities market – more volatile swings in market – driving up food prices – what should we do ? 24

×