Mondelēz consolidates global choco-bakery production in Hungary

By Oliver Nieburg

- Last updated on GMT

$50m investment over three years to consolidate Milka and Cadbury choco-bakery in Hungary now complete
$50m investment over three years to consolidate Milka and Cadbury choco-bakery in Hungary now complete

Related tags Compound annual growth rate Kraft foods Cadbury plc

Mondelēz has opened three production lines at its plant in Hungary to consolidate global production of Milka and Cadbury choco-bakery sandwiches.

The firm invested $50m over three years to add the lines at the Székesfehérvár chocolate plant.

The outlay included a new chocolate silo and a packaging and raw materials warehouse. Mondelēz also added 350 new jobs and upped capacity by 70% compared to levels three years ago.

Production costs and biscuit know-how

“Our Székesfehérvár plant was chosen as the optimal location for the investment because the plant is very competitive within Mondelēz International with multiple advantageous factors like overall production costs, biscuits production know-how, qualified employees, etc,”​ Virginie Mahin, external communications manager Europe at Mondelēz told ConfectioneryNews.

At the Barclay's Capital Back to School Conference earlier last year​, Mondelēz said it would close smaller sub-scale facilities and consolidate production at modernized sites.

Choco-bakery and Hungarian market

The Székesfehérvár plant will mostly supply export markets, but Mondelēz also recently launched Milka’s choco-bakery sandwiches to the Hungarian market.

Choco-bakery was highlighted as one of Mondelēz's key innovation platforms in its chocolate segment along with ‘bubbly’ and ‘bitesized’ when the company split from Kraft Foods in 2012.

“The Hungarian biscuits market is showing single-digit value growth with healthy organic growth in all segments,”​ said Mahin.

According to Euromonitor International, the Hungarian biscuit market grew at a compound annual growth rate (CAGR) of 4.9% over the last five years to reach $213.7m in 2014. The market is forecast for a 2% CAGR for the next five years.

Mahin said that Mondelēz was already number one in the Hungarian market with seven of the top 10 selling biscuit brands including Hungarian brand Győri.

Mondelēz holds a 44.6% share of the market and is trailed by Bahlsen (6.1%) and Detki Keksz Édesipari (6%) in second and third place respectively, according to Euromonitor International.

Mondelēz in Hungary

Mondelēz has been operating in Hungary for around twenty years. The Székesfehérvár plant also produces TUC, LU, Oreo and Ritz biscuits as well as some local brands.

Mondelēz also runs another factory in Győr, which produces Halls candies and Negro health drops.

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