Ecuadorian Cocoa Farming III

The goal of this campaign is to fund a family-owned company based in the coastal area of the Guayas Province (Ecuador), specializing in the aggregation, processing and sale to Europe and North America of conventional cocoa beans and semi-finished products (Liquor, Butter and Powder).

The Company was established in 1996 by a local entrepreneur and it has become one of the leading national exporting companies of Ecuador's fine aroma cocoa, as well as special semi and premium gourmet chocolates - with an industrial process "bean to bar", and names of the traceable origin of the geographical areas most representative of fine aroma cocoa-producing in Ecuador.

With its two Plants in the Guayas and Los Rios provinces, the Company has a total of 20,000MT export capacity per year. 

Given the increasing presence of multinationals as well as local competition, the company invested in operations automation, mechanization and product diversification to become more efficient and competitive. By using high-end technology machinery specially made for the cocoa sector, it duplicated the volume of production and exports; reduced labour risk; the reduced time between the preparation of lots; improved homogeneity and quality of beans; reduced the percentage of human error throughout the stages of production; controlled production costs; improved quality. In addition, the Company implemented full automation of the entire factory, allowing management of all processes from a computer, laptop, or tablet.

The Company’s mission is to export the best fine Ecuadorian cocoa beans and their derivatives to the world, promoting fair trade with small producers and traders, and integrating the whole agro productive cocoa chain with international markets assuring high-quality standards and responsibility for human resources of the company and care of the environment.

The Company sources its produce from 2,500 cocoa farmers and is focused on improving their productivity and quality controls through two Private Sponsored programs, which benefit 5,000 families, as follows:

• A Program based on Quality, Traceability and Sustainability that offers farming communities technical assistance and training to improve productivity; advice and support for improving the quality and post-harvest; training to develop management, financial and trading capacities in communities: fairtrade practices to improve life quality in the communities. The goal is to establish a traceability system to guarantee the trace information of cocoa beans in each one of the processes, from production, postharvest handling and distribution. The Company works with a group of small-scale producer associations in this program.
• A sustainable project to improve the productivity of small producers of cocoa and to enhance their quality of life by using such tools as technical training and delivery of agricultural inputs. The main objective of the program is to obtain a fine flavoured cocoa grain with less fat and more flavour with the sponsorship of the Government of Sucumbíos (Cocoa Region) and in coordination with the main small farmers' associations. As of today, 680 cocoa producers enrolled in this program.

Overall, Ecuador is the 2nd producer of cocoa in Latin American after Brazil, and for many years, it has been recognized as the largest fine or flavoured cacao producer in the world.

There are two general categories of cocoa beans in the world: “fine or flavour” and “bulk or ordinary”. Fine cocoa production represents less than 5% per year of the world’s cocoa bean production and Ecuador is the largest producer of “fine or flavour” beans, producing over half of the world’s production – the raw material that is required in the European and American industries for fine chocolate production. Evidence from Ecuador suggests that the cocoa premium over the New York Stock Exchange price of fine or flavoured cocoa beans is 20% to 30%.

In Ecuador, approximately 360,000 hectares of cocoa are cultivated by approximately 90,000 farmers. Most of these farmers are relatively poor and operate on less than two hectares of land (according to representatives from non-governmental organizations in Ecuador). Their incomes are largely dependent on agricultural production with almost half generated by the sale of cocoa beans. 85% of cocoa production occurs in the coastal plain region of Ecuador.

The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Company from its procurement and processing stage, all the way through its exports. This is the tenth campaign promoted by Working Capital Associates to provide funding to this company and the sixth to provide funding to small producers from Peru and Ecuador.