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Agreed... ASP will be adjusted but cannot too much like cocoa price increase - customers cannot accept and pass their cost.
Nevertheless, if chocolate manufacturer has no cocoa, they cannot make their products also.
In the financial year ended Dec 31, 2023 (FY23), Guan Chong’s total borrowings jumped by 88% to RM2.2bil, bringing the net gearing level to a high of 1.21 times.
As a result, the finance cost or the interest paid leapt by 150% to RM140.2mil in FY23.
Interestingly, this was before the price of cocoa beans surged by over 130% since January this year.
It is noteworthy that cocoa bean prices have been on an uptrend since early 2023 - $2,500 only
FROM US$4,200 per tonne at the start of 2024, cocoa prices saw a dizzying spiral to an all-time high of US$10,080 this month.
For Guan Chong Bhd, the world’s fourth-largest cocoa grinder, the price upswing of over 130% in less than three months – even outpacing the erratic bitcoin – has added more pressure to its already stretched financials.
After all, the cost of cocoa beans accounts for about 80% of its total production cost.
