It is often said that in business success never comes easily, nowhere is this principle more fitting than with the story of Liberia Cocoa Corporation (LCC). Founded in late 2009, LCC is a 100% Liberian owned agribusiness nestled in the Northeast corner of the country near the Guinea border. Like its name suggests, LCC specializes in the production of the high quality commercial grade cocoa for the export market. The company’s socially conscience business model incorporates both community out-grower farmers as well as plantation style farming for its cocoa development. With an ambitious development plan to establish 6,000 ha of hybrid cocoa within the next 5 years, LCC will likely be the largest privately owned cocoa plantation in the Africa and certainly one of the largest in the world, if successfully implemented.
The company is the brainchild of its founder and CEO, Mr. Momolu (Lu) Tolbert (a western educated Liberian entrepreneur) who simply dared to challenge the perception that African run businesses are neither serious nor viable. Despite its many social and governmental challenges that confront Liberia, unique business opportunities still do exist – albeit not for the faint at heart. For what should have been a rather straight forward business implementation model, for the first two years, LCC was heavily bogged down by many challenges including having to deal with corruption, a culture in which people were unaccustomed to working in a professional environment and the difficulties of funding such a pioneering project.
As the CEO recently explained, “I never imaged that planting trees and creating jobs would be so difficult”. Part Hollywood movie, part political thriller, the story of LCC is one of survival, unwavering perseverance and the sheer will to succeed against all odds. Though the company has had many setbacks, it has had even more achievements. One such example is the company’s corporate social responsibility programs that have developed over 15 kilometers of new feeder roads, a 6 classroom primary school, local bridge construction, local scholarships, boreholes as well as plans to begin construction of a community clinic in mid 2014.
Like that of LCC, Liberia itself has experienced some turbulent times. After gaining its independence 1847 (the first African nations to do so), Liberia was for a while considered a beacon for economic and social stability. Though its economy was largely based on extractive industries such as iron ore mining and precious metals, the country also had vibrant agriculture sector that included ) rice production, poultry, timber, cocoa and coffee. At the time, Liberia was home to the largest rubber concession in the world (owned by Firestone) but also had locally owned commercial fisheries that exported processed fish and shrimp as far away as Japan, United States and the United Kingdom – as early as the 1960’s and 70’s. Despite its many industrial gains, Liberia , as with many other African nations during the 1960’s through 1980’s, the geo-political pressures of the Cold War coupled with the home grown movements for self determination and national identities brought with it social unrest and in extreme cases – bloody regime change.
Such was the case in Liberia when its 133 years of peace was abruptly ended in 1980 with a coup d’état that deposed of the then president William R. Tolbert and his administration. In the preceding years intermittent and protracted civil wars raged on until the signing of the Comprehensive Peace Agreement in 2003. Though peace was in place, the country was in virtual ruins and with it the once burgeoning commercial cocoa sector. Neglected during the war years much of the country’s cocoa trees were lost to the forest and its once internationally renowned research center (CARI – Central Agriculture Research Institute) completely destroyed.
Like neighboring Ivory Coast, the world’s largest cocoa producer, Liberia has ideal conditions for cocoa cultivation. With its rich soils, warm climate and over 170 inches of rain per year, Liberia has the very real potential to become a serious player in the world cocoa export market. Recognizing this potential, LCC has begun positioning itself through its outreach to thousands of out-grower farmers and the direct hiring and training of community based local labor for its nurseries and nucleus plantation. The wider social benefits of LCC’s business operation are palpable and can be seen in many ways but more significantly in the reduction in the number of food insecurity cases as many community household heads now earn regular monthly incomes.
Asoka Ranaweera, who is advising LCC on the development of its concession and marketing and sales, says that the company has a clear vision for producing the finest cocoa beans and in ensuring that its product is ethically sourced and fully traceable. This is a project whose success will revive Liberia’s prewar cocoa sector with big implications for the economy and the population at large most of whom are subsistence farmers according to Asoka.
Asoka who trades cocoa beans from different origins in Africa on behalf of a number of clients says the cocoa market is in a structural deficit during which years of neglect has resulted in falling supply. This coupled with increasing demand from countries such as China and India as well as revived demand in the U.S. and Europe has further contributed to a deficit in supply.
LCC is therefore primed to grow into a market in, which there is already significant demand and the forecast is for increasing demand years out. “Lu, the founder of LCC is typical of a new generation of African entrepreneurs, who have returned to their countries determined to make a difference. These guys want to make things happen, are resourceful and in the process are changing the image and perception of African businesses.” said Asoka. “Its people like Lu that are transforming Africa and its going to be private enterprise that is going to deliver the biggest impact because its self generated growth, not aid dependent” he added.
In a country and region where unemployment rates have in the past reached upwards of 80 percent, the need for private sector investment like that of LCC is crucial to the long-term peace and stability of the country. When asked about the challenges of doing business in Liberia, Mr. Tolbert was quoted as saying…“conditions in Liberia are extremely tough and this is primarily because the normal support structures that exist in other countries do not function well in Liberia. For example the country’s physical infrastructure, roads, bridges and power generation services all need major rehabilitation and without public investments to these areas, the country will have difficulty attracting the private sector especially in the area of agribusiness.
Another serious constraint, is acquiring access to financial capital. Most banks require a minimum of 150% collateralization on loans and often impose 12-24 months payback periods which as you know does not work for tree crops. ” With the exception of Bridgestone firestone and a few of the Malaysian oil palm giants such as Sime Darby and Golden Veroluem, there are no other companies quite like LCC and its companies like these that are at the forefront of reviving the country’s agricultural sector.
For more information on LCC