Barry Callebaut and Malaysian Cocoa Board to cooperate on developing superior quality cocoa and chocolate from Malaysia

* Collaborative research project aiming to improve the quality of cocoa and chocolate in Malaysia comprises:
o Barry Callebaut to provide its “controlled fermentation” technology to produce consistently high quality cocoa beans, increasing the value of Malaysian cocoa beans.
o The Malaysian Cocoa Board to conduct the research in Malaysia, to provide its state-of-the-art facilities and expert staff, and to help select test sites
* Barry Callebaut Malaysia to use controlled fermented “Superior Grade” cocoa beans in innovative cocoa and chocolate products to be sold mainly under the KLK Cocoa and Selbourne brand

Zurich/Switzerland - During a signing ceremony in Putrajaya, Malaysia, in the presence of The Honorable Tan Sri Bernard Dompok, Minister of Plantation Industries & Commodities, Barry Callebaut Malaysia, subsidiary of the world’s leading manufacturer of high-quality cocoa and chocolate products Barry Callebaut AG, and the Malaysian Cocoa Board signed a Memorandum of Understanding on a collaborative research project that is expected to result in higher quality chocolate from superior quality Malaysian cocoa beans. Specifically, the collaboration aims to improve Malaysian cocoa bean quality, focusing on optimizing cocoa taste, enhancing the amount of functional components and altering color. Additionally, the processability of cocoa beans will be enhanced.

The collaborative research projects will apply and assess different microbial starter cultures developed by Barry Callebaut for a “controlled fermentation” process. Fermentation is a process that is necessary for cocoa to develop its characteristic taste and flavor. While bean fermentation normally happens spontaneously in the bush or the cocoa plantation, Barry Callebaut developed a way to “control” and optimize cocoa fermentation. Controlled fermentation with defined micro-organisms provides consistent, predictable and superior cocoa bean quality. This in turn leads to improved flavor characteristics, zero-default cocoa beans, enhanced levels of functional components (e.g. flavanols), and improved processability. With the objective of protecting and developing the cocoa industry in Malaysia, the Malaysian Cocoa Board will engage its expert staff to carry out the research in its state-of-the-art labs in its R&D centers in Malaysia to evaluate the impact of controlled fermentation. The Malaysian Cocoa Board will also assist Barry Callebaut in identifying more sites for field tests in Malaysia.

Selbourne Estate, one of the leading estates in Malaysia, cultivating – among other crops – cocoa plantations in Pahang, will function as one of the test sites for controlled fermentation as well as for the implementation of pragmatic, improved agricultural practices which are expected to lead to improved cocoa tree yields. Selbourne Estate is owned by Kuala Lumpur Kepong BHD, one of the top plantation companies in Malaysia and 40%-partner in Barry Callebaut Malaysia.

More than 20 other sites have been identified for the first phase of implementation. Barry Callebaut intends to ramp up the volumes of controlled fermented ‘Superior Grade’ beans sourced from Malaysia to 5,000mt within the next 3 years. In its factory located in Port Klang, Barry Callebaut Malaysia will process the beans into premium chocolate and cocoa products and commercialize them in Asia-Pacific under the well-known Selbourne brand and KLK cocoa brands.

Barry Callebaut’s CEO Juergen Steinemann said at the signing ceremony: “Due to current growth limitations in cocoa supply from Ivory Coast – the world’s largest cocoa producing country – and our growing demand for cocoa, we have a strategic need to diversify our cocoa origins. Malaysia and neighboring countries currently produce about 15% of the annual global cocoa harvest and are logical sourcing alternatives to West Africa for us. On the other hand, many consumers in the traditional chocolate consuming countries of Europe and North America are used to the flavor of West African cocoa. Malaysia is the largest cocoa grinding country in Asia; Malaysian grinders import beans from Africa to make high-flavor cocoa products. Controlled fermentation will allow us to match the taste of Malaysian cocoa with the taste of West African cocoa. We are very pleased about this important partnership with the renowned Malaysian Cocoa Board and the experienced Selbourne Estate. Controlled fermentation is also an excellent means to support the Malaysian cocoa industry as it enables farmers to increase the value of their cocoa through consistently high quality, which will improve farmer incomes.”

Dato’ Dr. Azhar Ismail, Director General of the Malaysian Cocoa Board, said at the MoU signing ceremony: “There is serious competition from other commodity crops such as rubber and palm trees to the existing cocoa plantations in Malaysia. We see the partnership with Barry Callebaut as an excellent opportunity to further develop and sustain the cocoa industry in our country. If our cocoa farmers can earn more, they will continue to grow cocoa. This is good for our economy as well as for the biodiversity of our agricultural sector.”

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Barry Callebaut:
With annual sales of about CHF 4.9 billion / EUR 3.2 billion / USD 4.3 billion for fiscal year 2008/09, Zurich-based Barry Callebaut is the world’s leading manufacturer of high-quality cocoa and chocolate – from the cocoa bean to the finished product on the store shelf. Barry Callebaut is present in 26 countries, operates about 40 production facilities and employs about 7,500 people. The company serves the entire food industry, from food manufacturers to professional users of chocolate (such as chocolatiers, pastry chefs or bakers), to global retailers. Barry Callebaut is the global leader in cocoa and chocolate. The company is actively engaged in initiatives and projects that contribute to a more sustainable cocoa supply chain.

Barry Callebaut has four factories in Asia-Pacific: in Malaysia, China, Singapore and Japan. Its largest factory as well as its regional head office are located in Malaysia.

Malaysian Cocoa Board (www.koko.gov.my):
The Malaysian Cocoa Board (MCB) is a federal statutory research and development agency under the Ministry of Plantation Industries and Commodities. It was established in 1988 and has been in operation since 1989. The main objective is to develop the cocoa industry in Malaysia to be well integrated and competitive in the global market. Emphasis is given to increasing productivity and efficiency in cocoa bean production and increasing downstream activities.

Kuala Lumpur Kepong BHD (www.klk.com.my):
KLK is amongst the top plantation companies in Malaysia, with a land bank in excess of 217,000 hectares, located in Peninsular Malaysia (70,000 hectares), Sabah (40,000 hectares) and Indonesia (107,000 hectares). Whilst plantation remains KLK’s core business, the Group has expanded downstream into resource-based manufacturing, in particular oleochemicals and rubber processing.