Kraft pulls out of Hungary

Related tags Hungary

Kraft Foods has said that it will close down its only production
facility in Hungary and move production elsewhere. The company has
hinted that production of confectionery and coffee could shift to
Slovakia and Austria.

Citing inefficiencies and a lack of possibilities for future development at the Budapest plant, the US company added that the plant would be closing in the spring with the loss of 320 jobs. The announcement comes after last year's disappointing financial results for the global food giant.

The company has said that the year ahead should prove to be a year of consolidation as the company endeavours to eliminate some 6,000 jobs - or 6 per cent of its work force. Last year's earnings were down 7 per cent to US$869 million, compared to a year earlier.

Currently Kraft Hungary is the leading manufacturer of confectionery in the Hungarian market. But despite this fact, the company still views that by shifting confectionery to Bratislavia, Slovenia, it will still save money.

The company is also the third largest producer of coffee on the Hungarian market, but hopes that it will save money by shifting the production to Vienna, Austria.

The company confirmed that its existing lines of Kraft products would continue to be sold in Hungary and that for the most part the products would be imported from the Vienna and Bratislava plants.

The move to close the Hungarian plant forms part of the Kraft Foods recently announced four point plan for 'sustainable growth'. The plan emphasises investment in brand development, whilst trying to reduce costs for the company's overall structure. Kraft​ has refused to comment on whether there will further closures in the CEE region, but with inefficiencies dampening a number of its operations in the region, further consolidation seems likely.

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