St Vincent Cocoa Company shuts down operations here

The St Vincent Cocoa Company is closing its operations in St Vincent and the Grenadines.

The company notified Government last Thursday that they intend to wind down operations here,{{more}} Prime Minister Dr Ralph Gonsalves told SEARCHLIGHT.

The Prime Minister said that ECom, the company that took over ownership of the St Vincent Cocoa Company from Armajaro in November 2013, did not see real prospects of the local operation being financially sound for another four or five years.

“They just did not want to pour in any more money into the local operation,” Gonsalves said.

The Prime Minister said under the Memorandum of Agreement (MOA) signed in 2011, Armajaro was supposed to give two years notice of their intention to discontinue operations. As this was not done, ECom has instead agreed to leave their assets here for the Government to continue.

Also under the MOA, planting material was to be made available to farmers and the company also provided credit on a commerical basis to farmers in inputs and fertilizers.

Gonsalves said the company has also agreed to write off credit extended to local farmers, and for those people whose farms were used for demonstration purposes, the company has agreed to pay them a minimum of $1000 each.

Approximately 53 farmers had entered into agreements with the company.

“We will take up the slack of directing the operations in conjunction with the farmers,” Gonsalves said.

He said the 19 employees of the company will be paid severance, but a few might be re-employed by Government.

“We should be able to take on a couple of them back in the operations,” the Prime Minister said.

Minister of Agriculture Saboto Caesar, in a release, thanked the Armajaro Trading Limited, ECom Trading and the St Vincent Cocoa Company for their investment over the past four years.

“It must always be noted that prior to the St Vincent Cocoa Company, we had only 50 acres of cocoa in 2010, most of it in dire need of rehabilitation,” he disclosed.

“However, today we can boast that we have over 200 acres of well established cocoa; a gene bank, three nurseries with over 200,000 plantlets and a wealth of research information.”

The minister said he is confident that as a nation, “we are more than capable of utilising the investment we now have.

“We now have to advance our local cocoa industry,” Caesar said.

Sources say the St Vincent Cocoa Company has expended over US$3 million in their operations here to date.

The Prime Minister said any technical skills required to continue work in the cocoa industry could be sourced from neighbouring Grenada, or from personnel within the Ministry of Agriculture.

“I not in any way daunted about this. I think it is a matter which we can do,” Gonsalves said.

Armajaro Holdings Ltd sold its commodity trading arm to Swiss agricultural trader Ecom Agroindustrial Corp Ltd, in November 2013, creating one of the world’s biggest physical cocoa and coffee dealers in the world.

Armajaro had reported a US$7.5 million loss and negative cash flow in its fiscal year ending September 2012.