Barry Callebaut gains €700 million financing to secure future activities
Barry Callebaut's 2023 annual general meeting. Pic: Barry Callebaut
The Swiss-headquartered Barry Callebaut Group has reported achieving a major sum of €700 million on the Euro bond capital markets, as it seeks to secure its long-term financial future, writes Neill Barston.
As the company noted, the five year agreement matures on June 14, 2029, with the funds confirmed as being used for general corporate purposes.
Notably, as Confectionery Production has reported recently, the business has placed itself on a track of significant digital transformation to improve and streamline its international services.
However, it has faced a number of tests, which has led to the company indicating that it intended to cut 2,500 jobs from its global workforce amid turbulent global trading conditions that has seen demand for premium range products come under pressure, amid an ongoing cost of living crisis for many regions of the world.
As previously reported in April, the company posted a 11.1% six-month sales growth rise to CHF 4.6 billion, though its operating profit also dropped by 40% to CHF 178million for the period.
Taking a sustainability lead
While the company has faced challenges amid wider market uncertainties, the company explained it has taken steps to take a leading role on significant areas of business relating to its environmental performance.
As the business observed, it has forged a decisive policy in relation to the upcoming EUDR deforestation legislation, responding to the need to reduce rates of forest loss associated with the cocoa sector and a number of other industries in key sourcing locations including Ghana and Ivory coast.
The company said in a briefing on its EUDR strategy: “Complementary to our sourcing guiding principles, we have developed a robust due diligence toolbox, which combines various protocols and tools to assess and mitigate deforestation risks.
“We overlap publicly available, peer-reviewed land cover maps to effectively identify land use associated with mapped polygons in our supply chain. We have also embedded in our approach real-time deforestation monitoring through satellite monitoring systems equipped with high-resolution imagery to detect forest disturbance. The key findings of this system will be shared with relevant forest monitoring institutions in cocoa producing countries.
“We are also strengthening our yield control system to adequately mitigate the risk of infiltration of deforestation-related cocoa in our supply chain. Given that most cocoa producing countries have significant yield variations from one region to the other, while the complexity of the supply chain allows for infiltration to happen at various stages, such as farm or farmer group levels, the yield control mechanism has to be evidence-based and regionalised to effectively address the risk of mixing of compliant and non-compliant cocoa.”
Speaking on the company’s bond-raising activity, Peter Vanneste, CFO of the Barry Callebaut Group, believed that the move to raise capital would placed its future interests on a more secure footing.
He said: “We are pleased with the significant interest from investors that has enabled us to secure attractive long-term financing. While Barry Callebaut has a strong balance sheet, the issuance provides us with greater financial flexibility in the context of a volatile cocoa market environment.”
