Mondelez strengthens Malaysia supply chain amid cocoa price surge

Shah Alam: Mondelez International is strengthening its supply chain in Malaysia to cope with soaring cocoa prices, which have surged by triple digits in recent years. The company is producing cocoa crumb locally at its Cadbury confectionery plant, eliminating the need to import the material from Australia or South Africa. This new RM90 million Crumb Tower will enable Mondelez to manufacture both chocolate liquid and cocoa crumb on-site before combining them to create finished chocolate products.

Simon Crowther, Mondelez International Malaysia and Singapore managing director, explained that the shift gives the company greater control over this key raw material. Cocoa crumb is a mixture of cocoa, milk, and cocoa butter, which is then combined with chocolate liquid before being molded into Cadbury Dairy Milk bars.

Cocoa prices have faced significant challenges for manufacturers globally, with triple-digit growth over the past three years. While London cocoa futures fell to a near three-year low at the beginning of February, they surged to a record high of £4,773 after the United States-Iran conflict erupted at the end of February. The price has since eased slightly to close at £4,314, marking a year-to-date gain of just 1.55 percent.

The concentration of cocoa production in West Africa, particularly Ivory Coast and Ghana, leaves chocolate makers vulnerable to developments affecting crops in those countries. Mondelez sources its cocoa from this region before processing and refining it in Malaysia. Thus, the local production of cocoa crumb at the Shah Alam facility offers greater control over an essential stage in the transformation of raw cocoa beans into finished chocolate products.