Puratos Group gains €1 billion financing towards Cacao-Trace cocoa sustainability initiative
The Puratos group’s cocoa sustainability scheme, Cacao-Trace, has received a major boost as a group of private investors has agreed €1 billion finance package for the initiative, reports Neill Barston.
As the business explained, the move will enable long-term investment into supporting the sector’s development in backing key agricultural communities within its supply chains serving the confectionery sector.
The financing mechanics have been assessed by Peterson Projects and verified according to the ICMA1 principles of sustainable financing. Puratos completed this transaction together with BNP Paribas as Lead Arranger and Eubelius as Legal and Tax advisor.
The €1 billion long-term financing will support the purchase of more Cacao-Trace certified beans directly from the farmers, intensifying the collaboration with local cocoa communities. It will also be used for the construction of ten cocoa post-harvest centres and three grinding lines in Central and South America, Africa and Asia between today and 2026. This sizeable transaction marks Puratos’ first sustainable financing.
As the company noted to Confectionery Production, around 50 million people, mostly located in tropical regions, are dependent on cocoa for their livelihoods, and against this backdrop, on average, farmers in the sector in West African nations of Ghana and Ivory Coast earn less than €2 per day, which is far below UN-defined levels of poverty.
The Cacao-Trace programme was created in 2014 by Puratos & Belcolade, a brand from Puratos Group. Since its creation and as of today with the support of this group of private investors, the Cacao-Trace programme aims to increase its net positive social and environmental impact on the cocoa supply chain.
Focusing on superior tasting chocolate, the scheme generates value for all, from farmers to consumers. The programme trains farmers and helps them to deliver cocoa beans of superior quality, increasing their revenue through a premium price and a chocolate bonus of €0.10 per kilo of chocolate, on top of conventional farm gate price. Today the premium price and chocolate bonus add up to the equivalent of 3 to 4 extra months of salary. Cacao-Trace is already active in several countries across the globe: Cameroon, Ivory Coast, Mexico, the Philippines, Papua New Guinea, Uganda, and Vietnam.
Jean-Philippe Michaux, CFO and Head of the sustainability steering committee at Puratos, said: “Cacao-Trace is a long- term commitment by Puratos towards a sustainable cocoa supply chain. It goes far beyond the average industry standards for sustainable chocolate by creating value for everyone, starting with the cocoa farmers. We are there on the ground, alongside farming communities to coach 8.867 farmers to grow higher-quality cocoa and give guidance to run plantations in a more sustainable way.
“The sustainable financing was granted on a 20-year term, which shows both Puratos’ and its investment partners’ long term vision. As a family company we think in terms of generations. This funding will help us accelerate our efforts and further improve the positive impacts for the chocolate communities. It is our commitment to you and to future generations to enjoy the best tasting chocolate for many years to come.”
Jim Moore, Managing Director, Barings Private Debt Group: “Puratos is a strong innovative Company, and the steps they’re taking to improve their sustainability both environmentally and socially echo the focus that Barings also has on its ESG efforts”.
Tomas Fiege Vos de Wael, Group Head Sustainability, Peterson Projects: “We believe this financing will help scale up and raise the environmental ambitions of the green bond market and look forward to see the impact it will create for farmers in the cocoa industry worldwide”.