Sharechat Logo

Mondelez confirms Dunedin exit, will consider using third party for Kiwi candy

Friday 17th March 2017

Text too small?

Mondelez International, the US food group on a global push to cut costs, will close the doors on the Cadbury factory in Dunedin early next year. 

The multinational has been in talks with the union and staff for the past four weeks to try to find a way to keep the factory open but has settled on its original plan to wind down the facility by early next year, it said in a statement. However, it is open to Kiwi staples such as Pineapple Lumps and Jaffas being made by a third party in New Zealand, and a working group including E tū union representative Neville Donaldson, Dunedin city Mayor, Dave Cull, Otago/Southland Employers Association chief Virginia Nicholls, MPs and Mondelez management will seek out a potential candidate. 

"Following four weeks of detailed consultation with the union and employees to assess alternatives, we could not find a viable option that met global benchmarks and ensured the ongoing sustainable operation of the factory," Amanda Banfield, Mondelez area vice-president for Australia, New Zealand and Japan, said in a statement."Mondelez International remains committed to New Zealand and will continue to employ over 130 people nationwide to support the hundreds of small, medium and large retailers and business partners we have right across the country."

The decision spells the end for some 350 jobs at the factory, which was a major employer in the South Island city, and Mondelez said it will support relocating as many as possible for roles in Australia and the region.The company plans to keep the Cadbury World tourism venture, which employs 36 people, and is considering redeveloping the site. 

Kraft bought the factory in 2010 as part of an 11.9 billion pound takeover of the global Cadbury group, of which the New Zealand assets were worth some $200 million. Kraft later spun out its global snacks business and renamed it Mondelez. In the first year of owning it, Mondelez injected about $80 million of new capital into the New Zealand entity. 

Since buying the Cadbury business, Mondelez's New Zealand operations have become closer to the global group, with 30 percent of its sales in 2015 going to related parties, up from just 21 percent in 2011.  

However, it hasn't been unprofitable for the group. Financial statements filed to the Companies Office show Mondelez New Zealand Investments shipped back $105 million of dividends between 2011 and 2015 on profits of just $39.8 million, and a related party loan of $120 million has accrued more than $40 million of interest payments through that period. 

The New Zealand holding company has also paid its parent royalties totalling $47.4 million and service fees and marketing rebates totalling $37.2 million.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports