Cloetta issues profit warning after factory fire

By Oliver Nieburg contact

- Last updated on GMT

Cloetta's plant in Turnhout, Belgium (pictured) affected by fire in June this year. Photo: Cloetta
Cloetta's plant in Turnhout, Belgium (pictured) affected by fire in June this year. Photo: Cloetta

Related tags: Industrial revolution, Production line

Scandinavian confectioner Cloetta warns its third quarter profits will be hit by a fire at a production lines at its Turnhout, Belgium, factory in June.

It expects Q3 adjusted operating profit will be SEK 40-50m ($5m-$6.3m) lower than the same quarter last year.

The Swedish-based company said fire damage to its production line had been greater than expected leading to production constraints and lower volumes.

Ripple effects

Cloetta installed new shifts at its other factories to compensate and outsourced some production.

The company said this was creating delivery problems, resulting in lost sales.

“It is unfortunate that the incident in our factory in Turnhout has created ripple effects in our factory network. In combination with higher raw material cost and negative exchange rate differences, this has created some short-term challenges,”​ said Henri de Sauvage-Nolting, president and CEO of Cloetta.

He said Cloetta intends to launch a cost savings program later this year.

The company will replace the damaged line in Belgium, which is due to be resume operations by Q2 2018.

Cloetta expects insurers will cover the fire damage.

Related topics: Manufacturers, Chocolate, Candy

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