Ferrero looks for growth in North America

By Peter Stiff

- Last updated on GMT

Related tags: Ferrero, United states, Ferrero spa

Italian confectionery giant Ferrero will soon open its first
manufacturing plant in the Americas.

The plant based in Canada, will serve the Central and North American markets, with 75 per cent of the output going to Mexico and the United States.

Ferrero expects construction to be completed by the end of February, and with the plant up to full production capacity within 90 days.

The aim is to have full coverage of the markets, before Christmas 2006.

The investment, which is thought to be close to €250 million, will at first only produce the Ferrero Rocher brand.

Situated in Brantford, Ontario the manufacturing complex will initially create 650 jobs. The number of employees is expected to double in two years.

The company believes the factory is ideally placed, half way between Toronto and the border with the State of New York.

Ferrero has distributed products in North America since 1969, launching, its entry in the market with the now famous Tic Tac brand.

One of Ferrero's major brands will however not be produced at the new facility.

Kind Surprise is banned in a number of states in the US because laws forbid the inclusion of toys inside edible products.

Another subsidiary of the privately held company is also looking to expand.

Ferrero Germany, which recently decided to allow discount retailer Aldi to sell its products, plans to launch two new brands.

Ferrero Garden and Kinder Joy will be on sale from May this year in a bid to boost sales.

The confectioner intends Garden to hold year-round sales to counter-act the summer period where sales of other chocolate products tend to drop.

Kinder Joy is also intended to plug the hole left in sales due to Kinder Surprise's absence during the summer months.

To promote the new lines Ferrero has set aside an advertising budget of €240 million making it the biggest advertiser in Germany's confectionery market.

In 2005 Ferrero became the first company to persuade German discount retailer Aldi to abandon its hard discount strategy and stock seven of its chocolate brands.

Ferrero are also no stranger to big budget advertising.

In 2003 the company undertook a €4.8 million advertising campaign to re-launch the Rocher brand.

The family business, established in 1946, is believed to have world sales of €4.8 billion.

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