Hershey Plans $250 Million Plant in Malaysia; The plant in the southern state of Johor marks the single-largest investment in Asia since Hershey set foot in Asia 18 years ago

October 4, 2013, 1:19 p.m. ET

Hershey Plans $250 Million Plant in Malaysia

JASON NG

At the announcement of Hershey manufacturing plant in Johor, from left: Hershey senior vice-president and chief supply chain officer Terence O’Day, MIDA chief executive officer Datuk Noharuddin Nordin, Hershey senior vice-president Asia, Europe, Middle East & Africa Peter F. Smit and M.E.I Project Engineers Sdn Bhd managing director Datuk Lim Kok Khong.

KUALA LUMPUR—American candy maker Hershey Co. said Friday it will build a $250 million confectionary plant in Malaysia, boosting its presence in Asia to meet growing demand for its products. The plant in the southern state of Johor marks the single-largest investment in Asia since the Hershey, Pa.-based company set foot in the region 18 years ago. Like other global food firms, Hershey is seeking to tap into surging demand for discretionary food items in developing nations in Asia. Hershey expects the plant to be ready in early 2015. The company currently has nine plants in the U.S. as well as facilities in Canada, Mexico, India, Brazil and China. “Our new Malaysia plant will complement production at our existing joint-venture plant in China,” Terence O’Day, Hershey’s senior vice president and chief supply chain officer, said in a statement. Production capacity details weren’t mentioned but the statement said the plant will produce four of Hershey’s five global brands, including “millions of Hershey’s Kisses” each day. Hershey is expanding in Asia as part of an ambitious global goal to achieve $10 billion in annual revenue by 2017. International sales is expected to reach about $1 billion by end of 2014, the company said.Updated: Friday October 4, 2013 MYT 5:50:40 PM

Hershey Company to build RM816m confectionery plant in Johor

BY SHARIDAN M. ALI

KUALA LUMPUR: The Hershey Company will invest RM816mil to build a new confectionery plant at the Senai Free Trade Zone in Johor to meet the growing consumer demand for its product in the region.

It’s the single largest investment in Asia in the 18 years of its footing the region.

The announcement was made today together with Malaysia Investment Development Authority (MIDA).

The Hershey Company senior vice-president and chief supply chain officer Terence O’Day said: Consumers across Asia are discovering a range of Hershey confectionary products and in China in particular is growing faster than any other market.

O’Day added that Hershey’s presence in Malaysia will create approximately 400 jobs.

Meanwhile, Bernama reported  Malaysian Investment Development Authority (MIDA)Chief Executive Officer, Datuk Noharuddin Nordin, as saying the plant, Hershey’s single-largest investment outside the US, was slated for completion in 2015.

“This is a testament to the continued attractiveness of Malaysia for multinationals making substantial commitments in the region. This project will bring years of positive economic benefits to Malaysia in the form of jobs and businesses for local suppliers,” he told a media briefing here today.

Noharuddin said the plant will be equipped with state-of-the-art technology and be one of the largest facilities in the company’s global manufacturing network.

He said the the move to set up the plant here will also benefit local cocoa producers, especially those which were already supplying it to the US firm. It was reported earlier that the establishment of the manufacturing plant will definitely benefit local cocoa processors, Guan Chong Bhd, among others.
Hershey said over 90% of the output from the factory would be exported, adding that this was good for the country as it would contribute about RM15mil in exports in the next 15 years.
Senior Vice-President for Asia, Middle East, Europe and Africa, Peter F. Smit, said Hershey anticipated sales of US$200mil to US$300mil within three years from 2017-2019.

The company expected its international sales to reach approximately US$1bil by end-2014, he said.

Hershey’s sweet deal

RUPA DAMODARAN

Published: 2013/10/05

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.