A number of operational decisions taken lately by the management of Cocoa Processing Company (CPC) have started yielding fruit promising to bring the company back to profitability.
In an exclusive interview with the company’s managing director, Nana Agyenim Boateng, he told Goldstreet Business that though the 2014/15, 2015/16, 2016/17 production season brought some operational challenges which resulted in unimpressive financial results, the company aims at a positive chapter for the 2017-2018 financial year and beyond.
He revealed that though the last three years presented a challenging operational environment with its adverse effects on the company’s fortunes, CPC remains unwavering in its quest to succeed in the years ahead.
Addressing stakeholders at the ‘Fact behind the figures’ event at the Ghana Stock Exchange, GSE, Nana Agyenim Boateng indicated that the company targets some US$3 million to recapitalize and improve the strength of its balance sheet.
He explained that “CPC’s current financial liabilities would require some time to improve and though the company’s consolidated projected income statement shows some positivity after three years, it will take some reasonable time for dividends to be paid to shareholders.
“Previous challenges including withdrawal of support by the banks and non-supply of cocoa beans for production are now a thing of the past. We have some banks currently proposing to do business with us due to our attractive restructuring plans to bring the company back to a more sustained profitability,” Nana Agyenim Boateng noted.
CPC has seen some difficult times with unfavorable economic, market, operational and environmental conditions from the time it secured a syndicated loan from a consortium of banks led by Barclays for its rehabilitation and expansion works. Since then it has consistently reported losses losses year after year resulting in serious cash crunch as it defaulted on the loans which had then totaled US$20m.
With this financial situation, CPC has been careful not to add to its debts, according to the MD adding, “We have had discussions with the management of COCOBOD concerning some debts we owed them, and they have agreed to resume the supply of cocoa beans to CPC. That definitely will increase production and propel us to greater heights.”
“We have resolved to make massive investments in infrastructure and machinery, invest in the Confectionary factory and improve operational management to minimize losses arising out of shortages and discrepancies.”
Although CPC has a capacity to process 64,500 metric tonnes (mt) at the two factories, an audit has indicated that the two are processing only between 70-80 percent of installed capacity.
Nana Agyenim, however said CPC intends to source for working capital to boost operations and improve earnings, adding, “this will be achieved with the retooling and replacement of some machinery parts to enable us process at least 48,000mt of the beans.