Cadbury and Kraft both look to Eastern Europe

By Staff Reporter

- Last updated on GMT

Related tags: Cadbury, Cadbury plc, Chocolate, Cadbury schweppes

Cadbury Schweppes is to invest £70 million in building a
manufacturing facility in Poland, whilst Kraft has moved production
from Norway to Lithuania.

Cadbury's new plant will manufacture chewing gum and is intended to support the company's growth and increased consumer demand for its brands. In 2004 the Europe, Middle East and Asian region saw a turnover of £349 million.

The facility is expected to be operational by 2008 and will create in the region of 300 jobs, with the possibility of future expansion.

Kraft's shift represents the 10 per cent of Norway's Freia brand, which is small chocolates, being relocated in order to concentrate production processes of smaller chocolates into one building in Lithuania. The move has resulted in 120 jobs being lost in Oslo.

With gum currently the fastest growing confectionery category Cadbury will look to gain, through a combination of its own brands and those gained through the acquisition of Adams, a larger market share in Europe.

Cadbury, currently number two in the region for chewing gum, will hope to match the success of its Hollywood brand in France, where it is the market leader.

A spokesperson told ConfectioneryNews.com that the location of the new facility in Poland was representative of a focus on low cost sourcing.

However she added there were other factors involved in the choice of location. Logistically it allows the company to serve the rest of Europe well from a central position.

Cadbury has been established in Poland since 1999, when it acquired the Wedel chocolate brand.

The spokesperson said that innovation was also important in building a market share in the category.

Cadbury aims to have innovation, that is to say new products, accounting for 15 per cent of its sales. From 2003 to 2004 it achieved an increase of six to nine per cent, and a higher rise is expected next year.

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