Barry Callebaut has announced plans to relocate production to a new site in Japan to meet rising demand from domestic confectioner Morinaga.
Callebaut has entered a 10-year chocolate supply agreement with Morinaga, to provide 16,000 tonnes per year.
The deal renews and extends an earlier 10-year agreement signed in 2008 to supply 9,000 tonnes.
Plant closure and new production site
Under the partnership, Barry Callebaut will move production from its factory in Amagasaki to a newly built site in Takasaki, 100km north of Tokyo, in a €15.4m ($19.4m) investment over the next year.
In 2010, Morinaga announced that it would focus part of its operations around Takasaki. Barry Callebaut has taken the decision to relocate production to be closer to its main customer in Japan.
The new plant will have a greater production capacity, but Raphael Wermuth, external communications manager for Barry Callebaut, told ConfectioneryNews.com that the company was not communicating exact figures.
Callebaut will serve both Morinaga and third party customers at the Takasaki factory.
The Amagasaki plant will close in mid-2013 and the 30 employees at this facility will all be offered to relocate to the new site, said Wermuth.
Barry Callebaut said it would also be strengthening its sales operations in Japan to “open up previously untapped market potential”.
The company will also cooperate more closely with Morinaga in R&D.
Wermuth said: “The Japanese chocolate market is naturally adapted to chocolate and cocoa products that have health benefits.”
He said that one part of the R&D department’s focus would be functional chocolate, while researchers would also look at recipe optimisation and new flavour offerings, such as nuts, inclusions and decorations.
He added that Valentine’s Day was very important in Japan and could present further opportunities.
Morinaga and Japanese chocolate market
Morinaga is the third largest chocolate firm in Japan, behind market leader Meiji and Lotte. Nestle is the only confectioner outside of Asia to make the top five, and is positioned fifth, behind domestic player Ezacki Glico.
Morinaga’s president Masayuki Yada, said: “By outsourcing the chocolate production to Barry Callebaut, we can focus our resources on R&D and marketing of consumer-chocolate, one of our core businesses for further expansion.”
Callebaut in Japan and Asia
Barry Callebaut’s main competitors for chocolate production outsourcing in Japan are Fuji Oil, Daitocacao, Nisshinkako. The company also faces competition from Petra Foods in the wider Asian market.
Callebaut currently has four production facilities in Asia: Signapore, China, Japan, and Malaysia.
It plans another facility in Indonesia in early 2013.