Ferré & Consulting Blog (English Version)

Hershey plans to spend $250-$350 million in capital investments to improve and expand its facilities, while cutting up to 600 jobs as part of its overhaul.

The ‘Next Century’ capital investment includes a $200-$225 million plant expansion of the existing West Hershey facility and approximately $50-$75 million in distribution and administrative facilities located in Hershey, Pennsylvania.

As part of the project, production will transition from the company’s century-old facility to a planned expansion of the West Hershey facility, which was built in 1992. This change is expected to result in the reduction of approximately 500 to 600 jobs as investments in technology and automation result in enhanced efficiency in the new building.

David West, president and CEO, says, “Our investment will create a highly flexible, cost-effective manufacturing facility that will enable us to remain competitive with global players. The old factory is a proud part of the company’s heritage, but the facility is over 100 years old, and simply cannot be modernised to meet the manufacturing needs of a 21st century business. We operate in an ever-changing global marketplace and will continue to make the difficult decisions necessary for our business to succeed over the long term.”

Hershey estimates that the Next Century program will incur pre-tax charges and non-recurring project implementation costs of $140-$170 million over the next three years. This estimate includes $20 million in project implementation and start-up costs. At the conclusion of the program in 2014, ongoing annual savings are expected to be approximately $60-$80 million.

The Company expects 2010 net sales to increase 6-7%, including an approximate one point benefit from foreign currency exchange rates. Operational savings from project Next Century will not begin to be realized until very late 2011 and will be fully achieved in 2014.

Companies expansion plans, Hershey, job cuts, project Next Century

Confectionary giant Hershey is inviting people to visit its Create Your Own Candy Bar experience.

Located at the firm’s Chocolate World factory, the experience allows people to select their own ingredients and design packaging for their sweet treat.

Ingredients on offer include graham crackers crumbs, crisped rice, blueberry fruit gels, chocolate cookie bits, vanilla chips and rainbow jimmies.

They will also be able to activate the machinery that makes the chocolate bar, dressed in official factory aprons and hairnets.

“Hershey’s Chocolate World’s new Create Your Own Candy Bar attraction will allow each guest to play the role of a chocolate innovator,” says Amy Hahn, general manager, The Hershey Experience.

“Giving people a chance to create their own chocolate bar and see how authentic factory equipment operates is not common in the chocolate industry. It marks another reason to visit Hershey’s Chocolate World.”

Hershey’s most popular confectionary products include Hershey’s Kisses, Reese’s Peanut Butter Cups, Jolly Ranchers and Twizzlers.

Chocolate chocolate bar, chocolate industry, Hershey

The British press hopes that the new is confirmed, while the market awaits the reaction of Kraft.

The American firm Hershey and the Italian Ferrero studied together to jointly bid for Cadbury, as the British press.

The alliance of the two companies of multinational dimension is presented in the form of an only viable alternative to the public offer of hostile acquisition (tender offer) formulated the past October by Kraft and which evaluated Cadbury in 11 thousand million EURO. This quantity was described as “ridiculous” by the British chocolate signature.

Like it was commented on a close source of Cadbury to the newspaper The Guardian, the signature did not receive for the moment notifies on this alliance supposed between the two giants although the British press indeed awaits it. The experts of the market await reaction of Kraft on a possible improvement of their offer by Cadbury.

Companies Cadbury, Ferrero, Hershey, Kraft