An appraisal of investment and technology decisions in cocoa processing In Nigeria.
The study examined the cocoa beans processing technologies adopted by farmers and processors in the cocoa processing industry in Nigeria. It further investigated the investment and technology decisions of cocoa in processing organization. This was with a view of developing appropriate framework to enhance the growth of cocoa processing industry and the cocoa rebirth programme. The study covered 400 cocoa farmers purposively selected in five major cocoa producing States in Nigeria and six cocoa processing organizations. Questionnaire technique supplemented with oral interview of cocoa farmers and officials of cocoa processing organizations was used for the study. The questionnaire and oral interview elicited information on investment and technology decisions, post harvest activities of cocoa farmers, investment in modern farm implement, chemical and new planting, technology and funding decisions in cocoa processing organizations. Secondary data were collected from the annual reports and accounts of FTN Cocoa Processors Plc., Multitrex Integrated Foods Plc. and Stanmark Cocoa Processing Ltd. The data collected were analyzed using descriptive and inferential statistics. The result showed that majority of the farmers (68.53%) did not ferment their cocoa for more than four days and as against the best practice of 5 to 7 days to ensure better product quality Investment in quality spraying pumps, new planting herbicides were low with a rating indices of 2.78, 1.86, 2.32 on 5 point likert rating scale respectively. Investment in new planting were found to be profitable, the sensitivity analysis showed that at a minimum attractive rate of return (MARR) of 10%, the present worth of an hectare of cocoa farm over 25 20, 15 and 10 years horizon were N712,817, N633,721, N486,540, and N249,484 respectively and a pay back period of 6 years but few farmers invested on new planting of cocoa trees. Majority of the farmers invested less than 20% of their annual income on technology assets. About 50% of the incorporated cocoa processing companies in Nigeria were moribund. All the cocoa processing companies included in the sample did not exceed 60% capacity utilization for the period of 2007 to 2011 considered in the study. The operating companies had adequate investment in technology for processing activities which were acquired by purchase of technology with substantial borrowed fund. Lack of raw material was identified as major constraints to the operations of the cocoa processing companies. Investment in technology was found to impact positively on production efficiency (4.45); labour cost savings (4.18) and quality of products (4.26). The study concluded that cocoa farmers did not invest adequately in technology assets and new planting because of lack of capital and non-ploughing back of income generated due to low income and social needs. Despite the substantial investment on technology by cocoa processing companies there were low capacity utilizations in the industry due lack of adequate working capital to stock pile cocoa beans.