United Cacao Aim listing to answer rising demand The first listing of a cocoa plantation-owner on Aim, London's junior market, is set to happen next month, underlining how chocolate consumption is growing rapidly in emerging markets such as China and India. Monday's announcement by United Cacao, which is developing a plantation in Peru, comes amid concerns that the structure of the cocoa industry cannot meet rapidly rising global demand. More than 70 per cent of the world's cocoa is grown in west Africa by smallholder farmers, who have traditionally supplied the world's confectionery industry, which has about $110bn in annual sales. The recent Ebola outbreak in west Africa has focused attention the risks of operating in the region. The Ivory Coast, for example, was marred in civil war for much of the early 2000s, while the presence of Islamist militants continues to threaten stability in northern Nigeria. Even without these problems, west African supply does not look like it can grow quickly enough to meet strong confectionery consumption growth as land rights remain an issue and yields remain low because of a lack of funding for modern agricultural practices. "[The cocoa growing industry] is an industry that hasn't changed for the last 100 years," says Dennis Melka, United Cacao's founder and chief executive. He believes that his business will be supported by the tropical climate in Peru, the focus on disease-resistant varieties of cocoa and transparent labour practices. The company is aiming to raise £10m by offering new shares which will be equivalent to 37 per cent of the group. After the float, Mr Melka will hold a fifth of the group, with the rest owned by wealthy individuals and agricultural funds in Asia and South America. United Cacao, which is planning to plant cocoa in Peru on a 3,250ha plantation, an area equivalent to two-thirds of Manhattan, is one of an increasing number of plantation companies looking to grow cocoa in Latin America. Others include Agro Nica Holdings in Nicaragua and family-owned ROIG Agro-Cacao in the Dominican Republic. The chocolate industry is closely watching the plantation companies" plans as the groups look to grow the commodity on a large scale similar to that of palm oil. One big issue is that, unlike palm oil, cocoa has yet to be proven as a large scale agro-industrial crop. Experts warn that there is little data on yields and returns on capital. Mr Melka was co-chief executive of Asian Plantations, a palm oil group based in Malaysia. It floated on Aim in 2009 and was sold to Felda, a Malaysian agribusiness, this year for just over £100m. United Cacao believes that its low cost of production, set to be about $900 per tonne, compared to the price of the commodity, which has been trading at just under $3,000 a tonne, will enable it to withstand potential volatility in commodity markets.