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Ferrero to boost South African production by local sourcing

By Oliver Nieburg+

26-Jul-2012
Last updated on 26-Jul-2012 at 12:02 GMT

Italian chocolatier Ferrero plans to upscale production in South Africa by utilising local raw materials and packaging.

The company entered South Africa in 2006 and opened a new production facility in Walkerville in 2009.

Local sourcing

A Ferrero spokesperson told ConfectioneryNews.com: “Initially, several manufacturing inputs were imported.”

“The new planned investments are aimed instead at increasing the vertical integration of the manufacturing process by relying more on the utilization of locally manufactured inputs.”

“The main focus, at present, is not so much on increasing production capacity but rather on improving the production process by utilizing local inputs (e.g. raw materials and packaging products, etc.), as well as  locally manufactured semi-finished products, in every step of the production cycle.”

The company’s in-country operation, Ferrero Social Enterprise South Africa, currently employs about 300 people.

Planned Tic-Tac introduction

Ferrero expects to take on an additional 50 workers after completing the vertical integration.

The firm currently produces Kinder Joy in South Africa, but the spokesperson indicated that there were plans to also produce Tic Tac locally.

The company’s efforts are mainly to improve production for the South African market. However, the spokesperson said that limited amounts would be produced for countries in the South African Development Community (SADC) region.

The market place

Ferrero currently commands twelfth place in the South African confectionery market with a 0.3% share in 2010, according to the latest data from Euromonitor International.

Kraft Foods/Cadbury holds top spot with a 33.1% share, followed by domestic manufacturer Tiger brands on 24.3%.

The South African market would seem fairly buoyant.

Figures from Leatherhead Food Research show that the market saw a hike in confectionery sales of over 19% between 2006 and 2010.

The market analysts say South Africa has one of the largest and most well-established confectionery markets on the African continent, with high per capita chocolate consumption by African standards.

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