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November 19, 2008

German chocolate manufacturer invests in coffee growing countries

Barry Callebaut, the world's leading manufacturer of high-quality cocoa and chocolate products, has been committed to contributing to a more sustainable cocoa industry in Africa for many years. Africa supplies about 70% of the world's cocoa harvest.

October 2008 saw Barry Callebaut launch a tree-planting project in Tanzania for organic smallholders, while in Ivory Coast the company inaugurated its significantly expanded cocoa factory in San Pedro and a health center for cocoa farmers and their families in Goh. Tree-planting project for 3,000 cocoa farmers in Tanzania.

In October 2008, Biolands and Barry Callebaut started a tree-planting project with the support of Sarotti and the internet portal Utopia: 250,000 cocoa seedlings were nurtured in more than 100 tree nurseries in various villages of the Mbeya region, in south-west Tanzania. In about three months, at the latest by March 2009, the resulting saplings will be strong enough for planting out in order to rejuvenate the existing cocoa plantations. The additional planting of 10,000 crop and shade trees increases biodiversity and yield. These trees will also supplement the dietary needs of the 3,000 participating farmers and their families. The small fee which the farmers have to pay for the trees serves to enhance their appreciation of the trees and encourages them to treat the trees with the necessary care – an important aspect for the success of the project.

Biolands in Tanzania is the largest African exporter of certified organic cocoa and has been selling its entire harvest of the highest quality to Barry Callebaut since 2000. In April 2008, Barry Callebaut acquired a 49% stake in Biolands. Since it was founded in 1999, Biolands has been working directly with smallholders, who now number about 20,000, in order to guarantee them fair prices and to help them improve the quality and value of their production.

This includes switching to organic farming, training in improved farming methods and also increasing family income and supplementing the dietary needs of farmers with further agricultural products such as rice, citrus fruits and mango. Neither Biolands nor Barry Callebaut own any cocoa plantations nor plan to buy any.

Sarotti is the consumer brand of Barry Callebaut in Germany. Utopia is a rapidly growing internet community, whose members are committed to strategic consumption and a sustainable lifestyle.

Also at the end of October, Barry Callebaut inaugurated new production lines in the existing ISO9001-certified cocoa factory of its subsidiary SACO in San Pedro, in the west of Ivory Coast. The investment of EUR 30 million (almost CHF 50 million) over the last two years, which has led to a tripling of the annual processing capacity to 105,000 tonnes and created another 75 permanent jobs in the factory and several hundred seasonal jobs in the bean-sorting and cleaning facility, is a sign of the long-term commitment of Barry Callebaut to Ivory Coast.

It also underlines the strategy of Barry Callebaut to engage increasingly in direct purchasing of cocoa in the countries of origin rather than over the commodity exchanges, and to process a part of the cocoa in these countries.

At the end of October 2008, Barry Callebaut inaugurated a health center in Goh, near San Pedro, to provide basic healthcare to local cocoa growers and their families. The facility will offer medical assistance to 18,000 people.

CEO Patrick De Maeseneire explains the motivation for this commitment to Africa as follows: “Africa is of utmost importance for us and our business, because the quality of the finished chocolate product is already determined in the country of origin. It is therefore important for us to give something back to these countries. Poverty is often the root cause of non-sustainable farming practices and exploitative child labor, which is unacceptable. Our efforts in the area of corporate social responsibility start at the very beginning of the value chain, namely with the cocoa growers, in order to find ways to achieve greater sustainability in the complex and fragmented chain that extends from cocoa cultivation to the end-product. In addition we maintain various programs – from housing developments, healthcare and training – for our about 800 colleagues working in the cocoa-growing countries of Africa and South America.”

Barry Callebaut is the only cocoa and chocolate company to operate cocoa factories in all of the world’s major cocoa-growing countries: Ivory Coast, Ghana, Cameroon, Brazil and Malaysia.

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