United Cacao (AIM: CHOC), the AIM-listed cacao plantation company based in Peru, announces the launch of Programa Alianza Producción Estratégica Cacao ("PAPEC"). PAPEC is an innovative small-farmer finance programme under which the Company extends low-cost financing for the planting of CCN-51 variety cacao, secured by the planted land, to select local families and then purchases their "wet" cacao beans for fermentation and drying at the Company's fermentation facilities to be opened later this year. PAPEC is intended to encompass in excess of 3,250 hectares of small-farmer plantings by 2018, subject to the Company having sufficient working capital to roll out the programme on a large scale and/or the Company putting in place a local micro-finance facility.
If concluded, this would represent a doubling of the Company's previously stated objective of planting 3,250 hectares on its privately held, agriculturally zoned estate, as set out in the Company's AIM Admission Document published on 26 November 2014, and thereby taking the total plantable project area to 6,500 hectares.
The Company intends to assist all its PAPEC participants to secure an internationally recognized certification accreditation, thereby enhancing the price at which the Company can then on-sell the fermented beans to international buyers.
The programme was officially launched on 17 April 2015 at the Company's second anniversary celebration in Tamshiyacu, which was officiated over by Rear Admiral Javier Gaviola of the Peruvian Navy and Commander of the Peruvian Northern Armed Forces. 150 families are participating in the first phase of PAPEC with one hectare each. It is intended that these 150 hectares of PAPEC cacao will be planted prior to 31 December 2015, with the provision of the necessary seedlings, fertilizer and equipment funded out of the Company's current cash resources.
Concurrent with the launch of PAPEC, the Company opened its Tamshiyacu community center which includes a PAPEC seedling nursery, children's playground, two football pitches and clean water pumping station for the town.
The Company is also pleased to report that, at recent industry conferences in Singapore and the United States, representatives from the Company experienced unsolicited approaches from a number of major confectionary buyers in China and Europe for immediate delivery of fermented bean samples in the second half of this year.
Mr Dennis Melka, Chairman of the Company commented: "PAPEC is an incredibly powerful initiative to deepen our relationship with the local communities and reduce poverty in the area around our existing operations. In addition, it allows United Cacao a unique opportunity to significantly increase its revenues over the long-term by expanding its planted area, comprising wholly-owned estate and PAPEC area, to a total of 6,500 hectares."
Mr Jaime Javier Garcia, Shapiama of the Asociación de Desarrollo Agrícola Amazónico, a locally based association of communities and farmers, added: "United Cacao has already improved the lives of hundreds of local residents through its employment opportunities, local purchasing of supplies and community programmes. PAPEC takes this commitment to Tamshiyacu to an entirely new level for which we are incredibly grateful. PAPEC will take hundreds of families out of poverty in the years ahead. The entire community stands firmly behind United Cacao."