Ferrero plans first factory in ‘strategic’ Chinese market

By Oliver Nieburg

- Last updated on GMT

Ferrero plans factory in blossoming Chinese chocolate market. Photo credit: China Haisum Enigneering
Ferrero plans factory in blossoming Chinese chocolate market. Photo credit: China Haisum Enigneering

Related tags Ferrero

Ferrero plans to manufacture in China to heap further pressure on chocolate market leader Mars.

Mars holds a 39% value share of the Chinese chocolate market, but lost some ground in 2014 to Ferrero and Hershey, both of which grew their share to 12%, according to Euromonitor International.

‘New industrial plant in China’

Ferrero’s latest corporate social responsibility (CSR) report​ said: “Another key decision was the investment in building a new industrial plant in China, aimed at supporting the development of Ferrero products in that area.”

Ferrero refused to comment on the factory, but a spokesperson told ConfectioneryNews:  “We can confirm to you that China is a strategic market for the Ferrero Group and, as for other important countries, there are plans of investment and growth according to the business vision of the Group.”

Construction project and job ads

Documents available online detail plans for a factory in Xiaoshan.

China Haisum Enigneering says it is constructing a facility for Ferrero​ in the Xiaoshan District, Hangzhou City, Zhejiang Province, across 97,948 m2​ of land.

Ferrero has also advertised online for production technology jobs​ based at the firm's 21st global factory in Hangzhou and has separately advertised for a plant warehouse manager.

Local news reports claim the Xiaoshan factory will produce 30,000 metric tons​ of chocolate and candies annually.

Ferrero in China

According to Euromonitor, Ferrero has doubled chocolate sales in China over the past five years to reach $190m in retail value sales in 2013.

The company employs 512 people in China, according to its latest CSR report, which represents 1.7% of its global workforce.

The firm currently manufactures toys for its Kinder brand in China, but products are imported from outside the country. Ferrero operates 20 plants worldwide including ones in India, Russia and Australia.

Premium image in China

Euromonitor expects a further $1bn of sales in chocolate confectionery in the next five years, representing a compound annual growth rate of 7%.

Jack Skelly, research analyst for Euromonitor recently wrote​: “…Seasonal products and a culture of gift giving are prevalent in the Chinese market, which makes it a particularly conducive market for both Lindt and Ferrero. Ferrero should consider tinkering with its formula to push the Ferrero Rocher brand in retailing and reinforce the brand’s premium image.”

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1 comment

Is the conversion correct?

Posted by Sejo,

I do not think five billion yuan equals $160 million.

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