KUALA LUMPUR: Guan Chong Bhd , the fourth largest cocoa grinder in the world, is buying an industrial chocolate maker based in Germany, expanding its downstream business in Europe following a recent venture in Africa.

The company, in a statement today, said it will pay €29.9mil (RM138mil) to acquire the entire equity interest in Schokinag Holding GmbH.

"Schokinag will require approximately 40 to 50% of the supply of cocoa ingredients from our upcoming cocoa processing plant in Cote D’Ivoire," managing director and CEO Brandon Tay Hoe Lian said.

"This ensures that our incoming new cocoa grinding capacity will be met with immediate demand,” he said.

In August, Guan Chong announced a plan to invest RM280mil over 18 months to set up a cocoa processing plant in Cote D’Ivoire.

The new plant will increase Guan Chong's production capacity by 60,000 metric tonnes (mt) per annum by the first quarter of 2021.

Guan Chong currently has a combined grinding capacity of 250,000mt per annum, with 130,000mt from its two factories in Pasir Gudang, Johor, and another 120,000mt from its plant in Batam, Indonesia.

Schokinag’s industrial chocolate plant has an annual capacity of 90,000mt, while its cocoa processing plant can grind 7,000mt of cocoa beans into cocoa mass per year.

“The acquisition of Schokinag certainly sets us strategically to target new growth opportunities in the world's largest chocolate consuming market," Tay said.

"The latest move is ideal as we aim not just to enlarge our global client base, but also expand our range of value-added downstream industrial chocolate products to supply to major chocolate players," he added.