US$250m INVESTMENT: New Johor plant to be key distribution centre for 25 markets across the region
HERSHEY, the largest chocolate producer in North America and well-known for its "Kisses" range, will invest US$250 million (RM795 million) in a confectionery plant in Johor.
The state-of the-art plant, which will feature the latest confectionery manufacturing technology, will enable the company to meet the demands of chocolate lovers in Asia and the Middle East.
Terence O'Day, the senior vice-president and chief supply chain officer for the Pennsylvania-based chocolate giant, said most of the products from the Johor facility will be for the export market.
"It will be an important distribution centre for 25 markets across the region," he said at a media briefing, here, yesterday.
The ground-breaking of the 700,000 sq ft plant, which will be part of the Senai Airport City, will be held in the next few weeks. It is expected to be fully operational by late 2015 or early 2016.
The plant, which will incorporate innovations in automated candy-making technology, including proprietary equipment and systems, will produce four of Hershey's five global brands, which are Hershey's Kisses, Ice Breakers, Reese's and Hershey's Milk Chocolate bars.
Peter Smit, senior vice-president for markets outside the United States (Asia, Europe, Middle East and Africa), said its investments will remain big in the region due to the fast-expanding middle-income bracket and demand for chocolate and new confectionery products.
"We are forecasting sales to grow by US$200 to US$300 million annually in three years."
Smit said the region is set to achieve US$1 billion in sales by end-2014 as the confectionery growth outlook is robust, significantly outpacing the US market.
The more than 100-year-old company aims to grow its business in the region from 10 to 30 per cent by 2018.
Malaysia now forms three to four per cent of its market share, while China is seen as an important market and will become Hershey's second largest market worldwide.
Malaysian Investment Development Authority chief executive officer Datuk Noharuddin Nordin said with Malaysia exporting 90 per cent of the output, it augurs well in terms of exports.
The country is projected to export RM15 billion worth of confectionery products over the next two decades.
Noharuddin said although local cocoa will not be enough to meet Hershey's demand, cocoa grinders will benefit from Hershey's plant. Malaysia is Asia's largest cocoa grinder.