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Cadbury owner Mondelez announces £75m upgrade of Bournville factory

Investment at Birmingham chocolate maker welcomed by unions and business leaders

Cadbury factory in Bournville

American owners Mondelez International have issued a massive £75 million vote of confidence in Bournville's Cadbury plant – securing the long-term future of the Birmingham factory.

The US parent group has announced a major upgrade in plant equipment to bridge the productivity gap with Europe and pave the way for Bournville to become a ‘world-class manufacturing site.’

The investment – which Chicago-based Mondelez says is dependent on a ‘successful conclusion’ to consultations with unions on productivity – was greeted as ‘brilliant news’ by Unite regional officer Joe Clarke.

“This is all positive – it is all about the long-term future of the site. We have had a difficult few years with a few fallouts but from our perspective, this is all good news.”

Consultations will centre on improving competitiveness, working more flexibly and investing in training. Almost 1,000 workers are employed at Bournville.

Mondelez said the investment would focus on "improving capabilities, reducing costs and changes to ways of working that, combined with the investment, will help to close the competitiveness gap between Bournville and its competitors".

The employee talks will focus on improving capabilities, reducing costs and changes to ways of working to close the competitiveness gap between Bournville and its competitors as well as sister factories in Germany and Western Europe.

Tim Pile, president of Birmingham Chamber of Commerce, said “This is a seminal moment for Bournville.

"Like other parts of British manufacturing there is a productivity gap in Bournville that needs closing, in order for Bournville to compete with the best in the world.

“The Chamber worked very closely with Lord Heseltine in the production of his ‘No Stone Unturned’ report in 2012, which examined the competitiveness of the UK. The report highlighted that it takes a British manufacturer ten hours to achieve the same output that an American worker can do in eight hours. This has to change.

“So it is no surprise that at Bournville, things need to improve. But the fantastic news is Mondelez believe in the potential of Bournville. Capital is global and moves round the world easily and fast.

“Mondelez could have chosen to invest in Germany, where chocolate bars can be manufactured at just half the cost. By putting this investment deal on the table, Mondelez is signalling its belief that Bournville has a great future.

“I would also commend the maturity of Mondelez’s approach to consulting with its employees. Technology investments of this type inevitably mean a requirement for fewer jobs. However, Mondelez wants to involve its employees in thinking through every idea possible before arriving at a jobs number.

“This is a once-in-a-lifetime opportunity to completely re-imagine how Bournville should be equipped and to install alongside the technology, similarly world-class practices in terms of flexible and competitive working practices.”

Jerry Blackett, chief executive of the Greater Birmingham Chambers of Commerce, added: “I have every confidence that the folks at Bournville will grasp this amazing investment prize and work with Mondelez on designing a business fit for the next 30 and 40 years.

”Neil Chapman, manufacturing director of Chocolate UK for Mondelez International, said: "Bournville has a proud manufacturing heritage and we are committed to ensuring it continues and becomes a world class manufacturing site. This investment would secure the site's future for the next generation.

"The competitiveness gap we have identified means we are already missing out on important opportunities to grow. Through our consultation, we want to hear as many ideas as possible from our employees on how, alongside our £75 million investment, we achieve improvements that boost competitiveness, thereby securing the next generation of manufacturing at Bournville."

Cadbury facts

About 1.2 million Cadbury Creme Eggs, 5.5 million blocks of chocolate, 400 million Dairy Milk Buttons, more than a million Wispa bars and 10 million chocolates such as Cadbury Roses and Heroes are made in Bournville every day.

The Bournville site opened in 1879 after George and Richard Cadbury moved manufacturing from the centre of Birmingham.

Cadbury's Dairy Milk chocolate bar was first produced at the plant in 1905, with the first cream-filled egg in 1923.

Since the acquisition of Cadbury in 2010 by Kraft Foods (now Mondelez International), the company said more than £130 million has been invested in its UK operations.

Bournville is home to the company's Global Centre of Excellence for Chocolate research and development site, so every new chocolate product created by the company anywhere in the world starts life at the Birmingham plant.

 
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