Kuapa Kokoo sustains profit under unfavourable credit regime

For the second year running, Kuapa Kokoo Limited posted positive financial outlook, after turning its first profit last year.

The only licensed cocoa buying company owned by Ghanaian farmers has been recording loses for five consecutive years, since 2006.

Executive Director, Emmanuel Arthur attributes the improved performance to farmers’ commitment to supply cocoa beans to meet needs of the company.

Kuapa Kokoo has already exceeded cocoa purchase target for the main crop season, buying 43,364 metric tonnes – the highest is seven years.

Mr. Arthur is confident the financial postings will be sustained in the years ahead.

“But we think that the challenges are such that the kind of profits we make is not the kind of profit that will enable us do much for members of a farmer’ organization such as ours”, he complained.

He is particularly worried at high interest rates paid on loans, which he says is depriving farmers of dividends in the company’s financial postings.

“The problem is that you work and you see that you’re working for the banks; it is just because interest rates are very high”, Mr. Arthur told Luv Biz Report at the 19^th Annual General Meeting of the Kuapa Kokoo Farmers Union (KKFU) in Kumasi.

Kuapa Kokoo paid interest on loans in excess of Gh₵6.3 million on its Gh₵144m sales cost for the 2011/2012 financial year. A profit of Gh₵388,265 was declared, against the Gh₵725,000 for the previous year.

A favorable economic condition would boost business and trading climate for cocoa farmers to experience positive impact on livelihoods, said the Executive Director.

Mr. Arthur also enjoined the farmers to adhere to standard practices to reap full benefit from cocoa production.

Factors militating against production include challenges in the haulage of cocoa beans from farming villages, poor processing and sorting of beans and unfair financial practices of cocoa purchasing clerks.

The 83,000 Kuapa farmers received bonuses from Fairtrade premium of Gh1.2m at Gh2 per bag of cocoa beans.

 

Kuapa Kokoo bought 43,649 metric tonnes of cocoa for the last main and light crop seasons, valued at Gh₵151.5 million.

President of the KKFU, Ms. Ali Fatima, announced a child-led community based approach to reduce the number of children in hazardous work on cocoa farmers.

The two year ‘Kuapa Kokoo Kids’ Camp Child Labour Project’ targets 230 children as change agents in cocoa production.

Story by Kofi Adu Domfeh