Cadbury stumps up £40m for chocolate factory revamp

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Related tags: Dairy milk, Cadbury plc, Chocolate, Cadbury dairy milk

Cadbury Schweppes, the world's number two confectionery
manufacturer, is to revamp its famous Bournville chocolate-making
facility, as demand for its Dairy Milk brand continues to soar,
Tom Armitage reports.

Proposed changes to the Birmingham-based facility, which will involve an investment of around £40 million (€58.6 million), include the construction of a 20,000-tonne moulding plant, new wrapping and packaging lines and the addition of a new chocolate making area. The changes are scheduled for completion in the autumn of 2006.

Currently the site manufactures its best-selling Dairy Milk brand, in addition to its Crème Egg, Milk Tray and Easter egg ranges, and is also the largest in the Cadbury Schweppes business.

"Following a decision by Cadbury Trebor Bassett to focus on key brands, Cadbury Dairy Milk has been the confectionery success story of the last four years, growing consistently since 2001 and becoming the UK's most popular chocolate brand,"​ the company said in a statement yesterday.

According to Cadbury, UK sales of its Dairy Milk-branded products reached £320 million (€469 million) during 2004 - a 10 per cent increase on the previous year. Conversely, the company's overall turnover in 2004 reached £6.74 billion (€9.88 billion).

Simon Baldry, the company's managing director, commented: "We are proud of our longstanding association with Birmingham and are delighted that our re-vitalised manufacturing capability at Bournville will enable us to meet growing consumer demand well into the future and focus on the next 100 years of Cadbury Dairy Milk."

According to industry analysts Euromonitor International​, Cadbury's Dairy Milk brand is the world's second biggest tablet-format chocolate bar and also the oldest product in Cadbury's chocolate product portfolio.

Dairy Milk increased its global market share from 4.8 to 5.2 per cent in 2003, securing it the title of the world's fourth biggest chocolate manufacturer (in the sugar-based confectionery sector, however, it remains the market leader).

Conversely, in the Western European sales region, its market share increased from 5.9 to 6.5 per cent.

The announcement coincides with the company's increased promotion activities for its Dairy Milk brand, which this year celebrates its centenary.

In 2003 Cadbury announced a major four-year restructuring plan, following heightened competition from its main competitors, Mars and Nestlé, and spiralling costs for cocoa, milk, packaging and logistics.

Cadbury's ambition is to achieve cost savings of around £400 million (€586 million) by 2007 - something which will also involve a 10 per cent reduction in the company's current workforce.

Meanwhile, Mars and Kraft have already taken similar cost-cutting measures in the UK.

In April last year, for instance, leading global food producer Kraft announced the closure of its York production facility - a move that will see the production of its Terry's Chocolate Orange, Terry's All Gold and Twilight brands transferred to alternative sites across Sweden, Belgium, Poland and Slovakia later in the year.

Conversely, Mars, makers of the eponymous best-selling chocolate bar, announced earlier this year that production of its leading Starburst and Twix brands is to be outsourced to Continental Europe - making 700 workers at its Slough production facility redundant.

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