DEERFIELD, Ill. -- Mondelēz International has announced an investment of more than $130 million in its North American biscuits business, as the company continues its strategy to modernize its manufacturing assets and processes and create a global integrated supply chain.
This investment will fund the installation of four state-of-the-art manufacturing lines—"Lines of the Future"—at the company's Americas production facility in Salinas, Mexico, which opened late last year.
This investment in these Lines of the Future will be completed by mid-2016 and will replace nine older, inefficient manufacturing lines at its Chicago biscuit plant.
Today's announcement builds on the company's earlier manufacturing investments of more than $170 million in manufacturing lines at its U.S. biscuit plants in Fair Lawn, N.J., Naperville, Ill. and Richmond, Va., as well as additional investments in recent years in technologies and capabilities within its North American supply chain.
"This new investment is part of our ongoing supply chain reinvention plan, as we implement several initiatives around the world to transform our global manufacturing processes to accelerate growth, reduce costs and improve productivity," said Daniel Myers, executive vice president of integrated supply chain. "These investments will enable a significant percentage of our global power brands to be produced on advantaged assets and are key contributors to our overall margin improvement."
The announcement follows a process that began in early April, involving discussions with employees' union representatives from the Chicago plant as well as company due diligence to select between Salinas and Chicago, the two locations that were considered for this investment.
"The Chicago plant has been and will continue to be an important part of the company's North American biscuit footprint, producing a variety of beloved consumer products," said Olivier Bouret, vice president of North America integrated supply chain for biscuits. "While the new investment will affect approximately 600 positions in Chicago, we're committed to treating all impacted employees fairly through this difficult time."
Despite the layoffs, the Chicago plant will continue to be one of the company’s largest North American manufacturing facilities in terms of headcount, and the company plans to continue to invest in capabilities, technologies and infrastructure upgrades at this facility.
Deerfield, Ill.-based Mondelēz is a global snacking company with 2014 revenue of more than $30 billion. It is a world leader in biscuits, chocolate, gum, candy and powdered beverages, with billion-dollar brands such as Oreo, LU and Nabisco biscuits; Cadbury,Cadbury Dairy Milk and Milka chocolate; Trident gum and Tang powdered beverages.
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