Sharechat Logo

Mondelez pulls pin on finding local manufacturer for Kiwi candy

Tuesday 17th October 2017

Text too small?

Mondelez International has given up on finding a local manufacturer for its New Zealand suite of candy and will ship production to Australia, having already decided to close the Dunedin Cadbury factory. 

The local arm of the multinational processed food maker offered to put local production out to tender for a New Zealand supplier after deciding to wrap up New Zealand production early next year, but has since given up on that idea when the only bidder struggled to meet Mondelez's requirements. The company investigated a number of alternative options including partnering with local firms to make the full product portfolio through to offering individual products to potential suppliers. 

"Unfortunately, we only received one formal response to the RFP documents from a local supplier that was interested in manufacturing the full portfolio of Kiwi products in New Zealand," Mondelez New Zealand country head James Kane said in a statement. "We’ve worked very closely with that supplier over the last six months to try and find a way for them to take on the work, however, the unique requirements of these products – particularly the marshmallow based products - meant it simply wasn’t possible." 

That means the company will press on with plans to transfer production to Australia as the global group consolidates manufacturing to improve margins. 

The Cadbury factory, which employs 350 people, will close early next year after Mondelez chose to shut the facility and move production closer to its Asian supply chain. 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 then, Mondelez's New Zealand operations have become closer to the global group, with almost 31 percent of its sales in 2016 going to related parties, up from just 21 percent in 2011, and generating profits totalling $47.4 million, almost a third of what's been paid out in dividends, and leaving the holding company with equity of $6.4 million as at Dec. 31. At the same time, its extracted $130 million in dividends from the New Zealand business. 

The company plans to keep the Cadbury World tourism venture, which employs 36 people, and in August committed to pumping in $7 million to redevelop the business. 

(BusinessDesk)



  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:

From dog tucker to top dog: economists ask how Northport can be Auckland’s best replacement
MARKET CLOSE: NZ shares rise; Metlife jumps on takeover talk
NZ dollar eases on technical factors, buoyed by higher dairy prices
RBNZ eyes Westpac Australia money laundering failures
Heritage buys Golden Healthcare; not mystery Metlife suitor
Alliance margins improve as swine fever boosts global meat prices
RBNZ eyes Westpac Australia money laundering failures
Precinct eyes new developments as Commercial Bay keeps to revised schedule
End to Tower's three year dividend drought in sight
Vital Healthcare's manager appoints new independent director

IRG See IRG research reports