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During a signing ceremony in Putrajaya, Malaysia, in the
presence of The Honorable Tan Sri Bernard Dompok (minister of plantation industries and commodities) Barry Callebaut Malaysia, subsidiary of the world’s leading manufacturer of high-quality cocoa and chocolate products Barry Callebaut, and the Malaysian Cocoa Board signed a memorandum of
understanding on a collaborative research project that is expected to result in higher quality chocolate from superior quality Malaysian cocoa beans.

Specifically, the collaboration aims to improve Malaysian
cocoa bean quality, focusing on optimising cocoa taste, enhancing the amount of functional components
and altering colour. Additionally, the processability of cocoa beans will be enhanced.

The collaborative research projects will apply and assess different microbial starter cultures developed
by Barry Callebaut for a controlled fermentation process.

The fermentation process

Fermentation is a process that is necessary
for cocoa to develop its characteristic taste and flavour. While bean fermentation normally happens spontaneously in the bush or the cocoa plantation, Barry Callebaut developed a way to control and optimise cocoa fermentation.

Controlled fermentation with defined micro-organisms provides consistent, predictable and superior cocoa bean quality. This in turn leads to improved flavor
characteristics, zero-default cocoa beans, enhanced levels of functional components (e.g. flavanols), and improved processability. With the objective of protecting and developing the cocoa industry in Malaysia, the Malaysian Cocoa Board will engage its expert staff to carry out the research in its state-ofthe-art labs in its research and development centers in Malaysia to evaluate the impact of controlled fermentation. The Malaysian Cocoa Board will also assist Barry Callebaut in identifying more sites for field tests in Malaysia.

Selbourne Estate in Pahang, one of the leading estates in Malaysia, which cultivates, among other crops, cocoa
plantations, will function as one of the test sites for controlled fermentation as well as for the
implementation of pragmatic, improved agricultural practices which are expected to lead to improved
cocoa tree yields. Selbourne Estate is owned by Kuala Lumpur Kepong BHD, one of the top plantation
companies in Malaysia and 40% partner in Barry Callebaut Malaysia.

The production sites

More than 20 other sites have been identified for the first phase of implementation. Barry Callebaut intends to ramp up the volumes of controlled fermented ‘superior grade’ beans sourced from Malaysia to 5,000t within the next three years. In its factory located in Port Klang, Barry Callebaut Malaysia will process the beans into premium chocolate and cocoa products and commercialise them in Asia-Pacific under the well known Selbourne brand and KLK cocoa brands.

Barry Callebaut’s CEO Juergen Steinemann said at the signing ceremony, “Due to current growth limitations in cocoa supply from the Ivory Coast, the world’s largest cocoa-producing country, and our growing demand for cocoa, we have a strategic need to diversify our cocoa origins. Malaysia and neighbouring countries currently produce about 15% of the annual global cocoa harvest and are logical
sourcing alternatives to West Africa for us. On the other hand, many consumers in the traditional chocolate consuming countries of Europe and North America are used to the flavor of West African cocoa.

Malaysia is the largest cocoa-grinding country in Asia; Malaysian grinders import beans from Africa to make high-flavor cocoa products. Controlled fermentation will allow us to match the taste of Malaysian cocoa with the taste of West African cocoa. We are very pleased about this important partnership with the renowned Malaysian Cocoa Board and the experienced Selbourne Estate.
Controlled fermentation is also an excellent means to support the Malaysian cocoa industry as it enables
farmers to increase the value of their cocoa through consistently high quality, which will improve farmer
incomes.”

Dato’ Dr Azhar Ismail, director general of the Malaysian Cocoa Board, said at the MoU signing ceremony, “There is serious competition from other commodity crops such as rubber and palm trees to the existing cocoa plantations in Malaysia. We see the partnership with Barry Callebaut as an excellent opportunity to further develop and sustain the cocoa industry in our country. If our cocoa farmers can
earn more, they will continue to grow cocoa. This is good for our economy as well as for the biodiversity of our agricultural sector.”