Kraft moves more output to China
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
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
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
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
Kraft Foods said last month that it will halt the use of genetically
modified ingredients in all products sold in China starting in 2007.
market analysts believe Kraft made the decision because its sales have been
adversely affected by concern among Chinese consumers over the safety of GM