Plans for new Otago chocolate factory shape up

Jim O'Malley, director of Ocho, hopes the new company will be able to produce 20 tonnes of chocolate products a week in the future. Photo/Linda Robertson.

The Otago Chocolate Company is on the verge of signing a lease on a large waterfront building, as plans to expand the crowd-funded business fall into place.

In November, Ocho's Pledge Me drive raised the maximum $2 million allowable within two days of being launched.

Since then, a new waterfront factory site has been identified and orders placed in Italy for chocolate-manufacturing machinery.

Ocho director Jim O'Malley, a former Dunedin city councillor, initially launched a bid to save the Dunedin Cadbury factory after its owner Mondelez revealed it would close down operations by March 2018.

But O'Malley changed his plans after deciding he would not be able to meet Mondelez's timeframes to bid for its confectionary manufacturing contract and would no longer seek to take over the Cadbury warehouse.

O'Malley assured the more than 3,200 people who bought shares as part of the campaign they would be hearing from Ocho as soon as the paperwork verifying their transactions was completed by Pledge Me.

''They are still finishing off anti-money-laundering legislation requirements,'' O'Malley said.

Shareholders would, in time, receive documents recording their stock purchase and stating they had voting rights proportionate to their investment.

He warned shareholders not to expect a short-term dividend from Ocho.

''We will be ploughing all revenue back into the enterprise, but anyone who has bought stock, that stock will be going up proportionately to the size of the company, and we imagine most stockholders would be happy with that.''

O'Malley said he wanted to see Ocho eventually making 20 tonnes of product a week.

''If we were at 20 tonnes, we would need around 80 employees.

''Conservatively speaking, I don't think that's even a difficult task.''

A December report estimated that 360 jobs would go at the Cadbury factory upon its closure.

Ocho, which makes just 100kg of chocolate each week at its Vogel St premises, has made a start gathering customers for that extra production.

Supermarket owner Foodstuffs is interested in taking at least one tonne of chocolate a week, a figure O'Malley was confident could be increased tenfold.

''To meet their demands alone, we think we would have to get to 10 tonne a week.

''We think we could achieve that growth organically,'' he said.

Ocho hoped to sign its lease and be granted consents as soon as possible to meet its target of manufacturing in its new factory by August.

The new machinery was expected to be delivered by May and the new factory to be set up in June and July. An internal refit would be the first job.

''We are working out details now, such as access and guarantees of rent and that sort of thing,'' O'Malley said.

''At first it will be manufacturing alone, but it will be laid out in such a way that we can do a tour around the outside, then there will be a tourism operation at the end.''

Ocho sources its Fair Trade cocoa beans from Papua New Guinea and Samoa, and intends to obtain beans from the Solomon Islands in the future.

It had already begun discussions with suppliers about buying more beans and hoped to be able to continue to source all its raw product from the Pacific, O'Malley said.