KANSAS CITY — U.S. cocoa processor and products supplier Transmar Commodity Group Ltd., Morristown, N.J., filed for Chapter 11 bankruptcy protection on Dec. 31, 2016, to restructure debts of more than $413 million, according to news reports and court documents.
Transmar said it plans to continue operating during the Chapter 11 proceedings. Deadlines for filing of various schedules were set during January with a Chapter 11 plan due by May 1, according to court documents.
Transmar Commodity Group is the U.S. unit of Transmar Group Ltd., founded in 1980 by cocoa trader Peter G. Johnson, a global supplier of cocoa products, including beans, powder, butter, liquor and specialty items, to the baking, confectionery and ice cream industries. Operations span the entire cocoa supply chain, including bean sourcing, logistics, processing and risk management of semi-finished products, with cocoa processing plants in the United States, Germany and Ecuador and contract manufacturers in West Africa and Indonesia. It is one of the world’s 10 largest cocoa processors with more than 350 commercial customers, including Hershey Co., Barry Callebaut AG, Mars, Nestle, Guittard Chocolate, Ghirardelli Chocolate and others, court documents said.
The bankruptcy filing unsettled the cocoa market, after Transmar Group Ltd.’s German unit, Euromar Commodities GmbH, declared insolvency in early December. Euromar was overseen by Peter G. Johnson’s son, Peter B. Johnson, who resigned in December.
Court filings suggest Transmar’s financial problems stemmed from a sluggish cocoa market the past couple of years, several unfavorable forward contracts (including some unhedged) and the United Kingdom’s vote to leave the European Union in June 2016 that caused the British pound to plunge (and cocoa beans priced in pounds to soar). Before declaring insolvency, Euromar attempted its own out-of-court restructuring that drew heavily from Transmar Commodity Group, including financial support. Court documents indicate Euromar owes Transmar at least $94 million in intercompany dealings. Euromar’s inability to pay Transmar Commodity Group along with the financial support of Euromar contributed to Transmar Commodity Group’s bankruptcy filing, court documents said.
Japan’s trading company Itochu Corp. took a 20% ownership stake in parent company Transmar Group in early 2016.Some U.S. cocoa product users, uncertain if they will get contracted material from Transmar, have been “tire kicking” at other suppliers but were finding higher prices since some of Transmar’s contracted business was said to be below current price levels, industry sources told Food Business News.