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Big Brands > Ferrero

Ferrero to build €90m site in Turkey to seize upon another growing market

By Oliver Nieburg , 31-Oct-2011
Last updated on 31-Oct-2011 at 15:19 GMT

Ferrero has announced plans to build a new factory in Turkey in the province of Manisa to leverage its position in a confectionery market that has grown 120% since 2004, according to figures from Mintel.

The news comes just a few days after the Italian chocolatier opened a production site in India, another emerging confectionery market with huge potential.

Ferrero looks to young population

Christian Walter, managing director for Ferrero UK told ConfectioneryNews.com: “Ferrero believes in the economic development of Turkey with its rapid demographic growth. Turkey is not only a strategic country for Ferrero as a supplier of commodities but also as a growing domestic market.”

The investment is about €90m on an area of 36 acres, and will contain a production line for Nutella and chilled Kinder products.

“The chosen province has a very young population and represents a good opportunity for Ferrero’s Social Enterprise (as defined by its mission) to develop the wellbeing and education of the children in this area,” said Walter

Analyst’s view

Chris Brockman, global food analyst at Mintel told this site: “In Turkey 27% of the population is under the age of 14, meaning that the kids market is very attractive. Nutella and Kinder are strong brands for kids.”

“Turkey is one of the most attractive markets in Europe for packaged food brands. Its retail market is rapidly evolving, it is a growing economy and the Turkish consumer's disposable income is leading to growth in packaged food sales,” he said.

He said that in 2010, Turkey's gross domestic product per capita increased to €10,530m, just half the EU-average, but the highest ever recorded in Turkey. Total consumer spending also grew in 2010 by 14.5%, following a 2.7% rise in 2009. The country's economy is expected to maintain this growth driven by a growing middle class consumer, he said.

He added that the growth rate for chocolate confectionery had been higher than anywhere in Western Europe over the last five years and further growth was expected.

“The Turkish retail market is buoyant. A number of global food and drink manufacturers, such as Kraft Foods, Danone and Pepsico, already have a presence in the market. However, other international conglomerates have also recently announced their intentions to invest,” he said.

“Turkey is also strategic as a low cost production base for export back into the rest of Europe - this may be just as important for Ferrero than the potential of the local market.”

Brockman said that developing a local presence in Turkey will help Ferrero compete with the significant number of other multinationals also investing in the country and give it a lower cost production base near key raw materials.

The factory should be finished by 2013 and will initially employ 200 people. Ferrero said another 200 jobs would eventually be created.

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