Cocoa from Chocoben sails to new markets with MOCCA

Cocoa from Chocoben sails to new markets with MOCCA

24/08/2021
in News
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Chocoben is an Ecuadorian company with more than 20 years experience producing and marketing of cocoa beans. After successfully completing an intensive training programme, Chocoben obtained their first loan to support cocoa enterprises from the credit cooperative Jardín Azuayo. This is an important milestone considering the lack of access to credit for coffee and cocoa producers in Latin America. Find out how Chocoben has used this opportunity to consolidate itself and how Rikolto has supported them through the MOCCA programme along the way.

Abdón Heras: We will have enough cash flow to pay 130 producers in the El Oro and Guayas areas.

"The credit of US$350,000 was invested in improving the plants and in working capital, which allowed us to offer services of buying and exporting cocoa to more Ecuadorian producers (...) to be prepared for market demand and to offer larger volumes," says Abdón Heras, president of the company. For him, this financial push helped them make their first export from the port of Guayaquil to a new market: Bolivia.

Lack of access to credit is one of the main obstacles faced by coffee and cocoa producers in Latin America. On average, a company like Chocoben requires US$2,500 per year to manage each hectare of cocoa.

Bearing this cost without the support of financial institutions puts pressure on the producers and entrepreneurs to choose between renovating cocoa plantations to maintain the business and investing in infrastructure or equipment to grow. This is exacerbated in times of crisis such as the pandemic.

This is part of the alliance that the cooperative and the company have with the Maximising Opportunities in Coffee and Cocoa in the Americas (MOCCA) programme, of which Rikolto is an implementing partner in Ecuador.

Access to credit boosts growth in pandemic

Heras admits that he was initially hesitant to ask for a loan for US$350,000 because he would have to mortgage his farm in the middle of a pandemic. However, the mere possibility of improving the business motivated him.

With MOCCA's support, he developed technical assistance workshops on cocoa fertilisation, pest and disease management, post-harvest and financial and fiscal administration for producers and workers.

This permitted him to secure his processes and the quality of his products, and to access a competitive 11% credit rate for infrastructure improvements. He is now enthusiastic about the expansion work in the company's drying area, the purchase of generators to improve the electrical system and the investment in a cleaning and sorting machine.

All this equipment has let them dream of new markets. "In Bolivia, there is a demand of speciality cocoa for the industry. This is an opportunity and the first ongoing export operation for us," says Abdón.

Chocoben's cocoa is national, premium and ASSS type, with a special profile. It was sold at a rate of US$2,700 per tonne FOB, US$300 above the price on the New York stock exchange. "The support allowed us to improve delivery times," he concludes, adding that after Bolivia he is looking forward to opening a market in Europe.

At the end of 2020, MOCCA and Jardín Azuayo worked together to grant loans to programme partners. This financing is granted to producers, associations, organisations or companies. To access it, they must also receive training, technical assistance and marketing support. This comprehensive support ensures the success of their harvests and sales and therefore the return on investment.

Partnerships to secure investment

"One of the difficulties faced by producers is the limited technical knowledge to improve their crops and the management of cocoa farms. Therefore there is a need for technical support, to complement the empirical knowledge and create better results that ensure a return on investment," says Galo Ismael Zhunio, territorial director of Jardín Azuayo, highlighting the commitment to small and medium-scale producers.

The farmers’ organisation finally gave the green light to the company's loan, which is also supported by the MOCCA programme.

"The credit granted has strengthened their operations. In addition to material improvements, it contributed to the strengthening of its cocoa commercialisation process, the construction of the commercial intelligence process and the opening of markets", adds Jardín Azuayo's representative.

Together with the public and private sector, the MOCCA programme promotes a renewed credit offer for Ecuadorian cocoa, accessible to producers, their organisations, and companies. It also promotes a training offer that improves production and marketing standards.

"This ensures a return on investment for producers, cocoa companies and lending institutions," adds José Luis Cueva, from Rikolto and manager of MOCCA in Ecuador.

Thanks to access to financial services, the programme ensures a decent income for 5,000 Ecuadorian cocoa producers and enables them to strengthen their businesses in times of crisis.

In addition to the alliance with Jardín Azuayo, agreements have been signed with the savings and credit cooperatives Hermes Gaibor and Futuro Lamanense; with the Faces Foundation to support producers in the programme "Green Financing for Agricultural Sustainability"; and with the Institute for Socio-Economic and Technological Research (Insotec) to strengthen financial services provided to producers in areas of common intervention.