Cadbury to focus on chocolate manufacturing “Centres of Excellence” – 330 jobs to go

Posted by Daniel Palmer on 21st August 2008

chocolate swirl - Cadbury

Cadbury has today announced a $135 million proposal to improve the productivity and efficiency of their chocolate manufacturing sites in Australia and New Zealand.

The changes will result in about 160 job losses over two years at their Claremont factory in Tasmania, with a further 145 expected to be lost in Dunedin, New Zealand and 25 in Ringwood, Victoria. Staff were informed at a meeting this afternoon after production was reportedly stopped at 4 this morning. The decision follows Cadbury’s announcement last year that they would be cutting 7,500 (15%) of their 50,000 strong workforce worldwide in coming years.

Cadbury reported in a statement that they would endeavour to improve their chocolate manufacturing operations at Dunedin, Claremont and Ringwood by developing each site into a specialist “centre of excellence”.

The Centres of Excellence will specialise in manufacturing specific types of chocolate products. Under the proposal, Cadbury would:

* transform its Claremont site into a centre of excellence for producing moulded chocolate blocks,
* create a centre of excellence for manufacturing chocolate bars at its Ringwood factory, and
* specialise in manufacturing assortments in Dunedin.

Rajiv Wahi, Chairman Cadbury Schweppes ANZ and President of Cadbury Schweppes Asia Pacific, reported that Australia and New Zealand will remain the central hubs of Cadbury’s Asia Pacific operations. “Our Australian and New Zealand businesses remain the cornerstone of our operations in Asia Pacific and central to our future growth ambition for the region,” he said. “Having reviewed all of the options available to us through our global operations, I am confident that the strategy being recommended today is the right option to meet our future needs, at the same time allowing us to capitalise on the efficiencies and capability available to us from within our Australian and New Zealand manufacturing operations.”

Cadbury Schweppes Managing Director Confectionery ANZ, Mark Callaghan, said the company was pleased to put forward a proposal that, if it proceeds, should assist in securing Cadbury’s manufacturing future at these three sites. “In order to compete in the extremely competitive confectionery sector in the future, we need to make changes now,” he advised. “When implemented these changes would reduce complexity, remove duplication and improve capacity, allowing us to be more innovative and responsive to consumer needs.”

Cadbury indicated that by the end of 2010, 330 fewer permanent roles will be required at the three sites. “We understand that this is a very difficult time for some of our employees. We have a long history of supporting our employees whenever we need to make changes to the business, and, if the proposal proceeds, we will ensure every affected employee receives their full redundancy entitlements, as well as comprehensive career planning and support services,” Mr Callaghan said.

Cadbury already operates a “centre of excellence” for gum manufacturing through a brand new purpose built manufacturing facility at Lad Krabang in Thailand. The company is also developing a Centre of Excellence in candy at its Scoresby plant in Victoria and has created an Asia Pacific Centre of Excellence for crumb manufacturing at Dunedin in New Zealand.

The proposal could be a part of a year of sweeping change for Cadbury Schweppes in Australia, with their beverage division currently under review. The company has advised the ACCC of a possible sale of their beverage operations (Schweppes), with the ACCC to continue monitoring the situation. If Schweppes is not sold then a demerger to separate the confectionery and beverage divisions is widely anticipated to occur.