Cadbury production moving to Australia

The Dunedin factory is to close in March next year. Photo: ODT files
The Dunedin factory is to close in March next year. Photo: ODT files
Production for Cadbury confectionery will move to Australia after bids to find a local manufacturer failed.

Mondelez has today confirmed production will move to Australia.

Mondelez New Zealand country head James Kane said the company had invested in an exhaustive search to find a potential manufacturer.

"Unfortunately, we only received one formal response to the RFP documents from a local supplier that was interested in manufacturing the full portfolio of Kiwi products in New Zealand," Mr Kane said.

"We've worked very closely with that supplier over the last six months to try and find a way for them to take on the work, however the unique requirements of these products - particularly the marshmallow-based products - meant it simply wasn't possible."

In February, Mondelez International confirmed the closure of the Dunedin factory, telling its staff 200 people would be made redundant by the end of the year and 100 people would remain with the business until early next year.

Mr Kane said hundreds of hours had been spent to try to find a workable solution for a potential local manufacturer, including a number of site assessments by technical experts.

Mondelez International will now focus on shifting production to Australia early next year.

"The iconic Kiwi products require particular technologies, production processes and skills, and very few manufacturers anywhere in the world could take on this work while continuing to match our product requirements," Mr Kane said.

The Dunedin team was playing a central role in the transition, he said.

Kraft bought the factory in 2010 as part of an £11.9 billion ($NZ21.9 billion) takeover of the global Cadbury group, of which the New Zealand assets were worth some $200 million. Kraft later spun out its global snacks business and renamed it Mondelez.

In the first year of owning it, Mondelez injected about $80 million of new capital into the New Zealand entity.

Since then, Mondelez's New Zealand operations have become closer to the global group, with almost 31% of its sales in 2016 going to related parties, up from just 21% in 2011.

It has generated profits totalling $47.4 million - almost a third of what's been paid out in dividends, leaving the holding company with equity of $6.4 million as at Decemer 31.

At the same time, it had extracted $130 million in dividends from the New Zealand business.

The company planned to keep the Cadbury World tourism venture in Dunedin, which employs 36 people, and in August committed to pumping in $7 million to redevelop the business.

- NZ Herald and BusinessDesk

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