Kraft shifts biscuit making to Suzhou
By Li Jian
SUZHOU: Kraft Foods is closing one of its two Melbourne factories
in Australia and shifting its biscuit manufacturing operation to
China , according to Kraft Foods (China) Company Ltd.
Kraft Foods told China Daily Shanghai and Delta that the decision
to move production from Broadmeadows biscuit plant in Melbourne
to its Suzhou factory was due to the high manufacturing cost in
Kraft spokesman Andrew Kilsby said the decision was made after a
"We're simply not producing enough biscuits out of that plant
in Melbourne to make it sustainable in the long term," he said.
"And manufacturing costs, despite our best efforts, we just
can't get down to a point where it's viable."
"From the consumer viewpoint, they won't see any change to
our brands," Kilsby said. "They'll still look and taste
the same, and have the same quality."
The products will be made in Nabisco Food (Suzhou) Co, Ltd, one
of Kraft's biggest biscuit plants. Kraft began building a new biscuit
factory in China to replace its Melbourne operation one year ago.
Elizabeth Cho, director of corporate affairs for Kraft Foods (China)
Company Ltd, said the production that is being moved to Suzhou from
Broadmeadows will be exported to Australia.
Many of the products from the Suzhou plant are exported to other
countries within Asia Pacific and the Middle East.
Jiang Nanfeng, an economic consultant with Suzhou Economy and Business
Research Centre, said Suzhou was one of the best destinations for
Kraft to shift manufacturing capabilities to, with its low labour
cost and convenient access to Shanghai, China's largest logistics
Kraft's Suzhou plant is one of the largest biscuit plants in the
world, with approximately 1,000 employees.
Its plant in Suzhou Industrial Park along with the newly built plant
has been able to accommodate the additional capacity brought on
by the transition from the Broadmeadows facility in Australia, said
a statement from Kraft Foods (China) Company Ltd.
Suzhou Industrial Park said they applauded Kraft's expansion in
Suzhou, which was expected to create hundreds of jobs.
Kraft's expansion in Suzhou highlighted its long-term campaign for
cost control, which is expected to cut 6,000 jobs and close 20 plants
all over the world by 2007. However, China will be an exception
in its job-cutting plan and will serve to replace redundant capacities
elsewhere in the world.
"China remains an important focus market for Kraft, and our
continued investments in China generally, and Suzhou specifically,
are proof of our on-going belief in China's ability to manufacture
world-class products for both local and international consumption,"
Kraft Foods (China) Company Ltd told China Daily Shanghai and Delta
via an e-mail.
"We believe we can grow our business here," it said.
A new biscuits manufacturing plant in Beijing is being built while
its plants in Guangzhou are gearing up to expand.
Currently, its Suzhou plant manufactures hundreds of biscuits and
snack products, including Oreos, Pacific Soda, Ritz crackers, Chips
Ahoy and Trakinas.