Mondelez International plans to close gum factories in Lebanon and Morocco as it moves to consolidate production into larger facilities.
André Benoit, director of corporate affairs for Mondelez in the Middle East told ConfectioneryNews: “In both cases we are looking at the whole of our footprint for gum in the company. Gum lends itself to consolidation”
Mondelez has previously complained of falling gum sales in established markets such as Europe as the economy takes its toll on impulse sales.
Asked if gum demand in the Middle East and Africa was suffering the same fate, Benoit said: “We are fairly stable. We have still not reached the potential in the region.”
He added that Russia and Ukraine were among the company’s most exciting growth prospects for the category.
105 jobs at Lebanese site
Mondelez’s factory in Beirut, Lebanon, under the Cadbury Adam Middle East subsidiary, had been producing gum brand Chiclets, Clorets and Halls. 105 permanent employees are affected by the closure
Cadbury Adams Middle East offices will remain in Beirut to serve commercial activities in the Levant region.
The company has yet to communicate which facilities will take up the volumes of the closed site.
Moroccan plant difficult to expand
Mondelez’s gum & candy plant in Casablanca, Morocco will shut its doors on 30 June this year. 43 full time staff will be affected but all will be offered roles in Casablanca at Kraft Foods Maroc Beverage plant, or Mondelez’s new biscuit facility acquired through the BIMO business.
Benoit said the Moroccan site was located in a residential area, which made it difficult to expand production.
This site had been in operation since 1957 and is currently manufacturing Clorets, Clark’s and Action chewing gum brands and the Halls candy brand.
All brands will continue to be sold in Morocco. Mondelez’s Trident gum is the number one gum brand in the country, while Halls is the premier mentholated candy.
Mondelez gum strategy
Gum & Candy is Mondelez’s second largest category in the EEMEA region after chocolate. The company is honing in on core markets for the segment including Russia, Ukraine Turkey, Egypt, Nigeria and South Africa as well as new markets which include Central Asia, Caucasus and Belarus.
The company which holds a 30% share of the global gum market behind Wrigley on 32%, saw its candy & gum segment decline around 3% in 2012 as other categories grew. Mondelez CEO Irene Rosenfeld has said that it will take around two years for the category to return to growth.
Rival Wrigley is also overhauling its gum processing operations. Earlier this month it announced that declining impulse sales had forced it to axe 207 jobs at its facility in France that serves multiple European countries ahead of a €50m ($65m) production modernization project. See HERE.