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Kraft moves more output to China
13/1/2006 11:18

Shanghai Daily news

Kraft Foods, the world's second-largest food producer, said it will shift production of its dry biscuit brands to China from Australia to cut costs.
Under a US$1.2 billion global restructuring plan, the largest US based packaged food firm will close the plant, one of its two in Melbourne by March.
It announced in January 2004 that it would axe 6,000 jobs and close up to 20 factories across the globe by 2007.
It is closing its biscuit plant in Australia because "manufacturing costs remain too high for the facility to remain sustainable within the highly competitive biscuits category," the company said in a statement.
The company will shift its production to a wholly-owned plant in Suzhou, Jiangsu Province, which it set up 10 years ago when it entered the Chinese market as one of the first batch of multinational food companies.
The Suzhou plant now produces biscuits for export to more than 10 countries besides supplying the Chinese market.
Kraft, which operates four plants in China, didn't reply to an e-mail yesterday on how much production will be added in China after the shift.
Kraft started building its fifth plant in Beijing last October. The plant, which is due to be completed by the end of 2007, will increase the company's total investment in China to US$200 million since its entry, the company said.
The new Beijing plant will manufacture key biscuit brands such as Oreo and Ritz for the domestic market and for export as well.
Kraft Foods said last month that it will halt the use of genetically modified ingredients in all products sold in China starting in 2007.
Some market analysts believe Kraft made the decision because its sales have been adversely affected by concern among Chinese consumers over the safety of GM food.