North American food maker Kraft Foods Inc. on Tuesday said it would close two Chinese biscuit plants and cut about 1,000 employees, part of its latest effort to trim costs.
The decision to rationalise the plants was taken following a thorough evaluation of the manufacturing configuration required to meet the needs of consumers across the Greater China area, Northfield, Illinois-based Kraft said.
Two plants located at Hangzhou and Shekou and one plant located in Tainan, Taiwan will be affected by the closings. The Hangzhou plant, near Shanghai, has been inactive since December 1999 and will now be closed permanently. Its equipment is in the process of being transferred to the Suzhou plant, which is also near Shanghai. The transfer of equipment will increase the capacity and efficiency of the Suzhou operation, Kraft said.
Production in the Shekou plant, near Hong Kong, will cease on December 16 and its products will be produced in the Suzhou and Beijing plants. In addition, Kraft said that its Tainan plant in Taiwan will be downsized and its production will be transferred to the Cikarang plant near Jakarta, Indonesia.