Kellogg to make mark in Malaysia
by Eric Schroeder
BATTLE CREEK, MICH. — Kellogg Co. will build a new snacks manufacturing facility in Malaysia, part of its recently announced Project K four-year efficiency and effectiveness program. The new facility, in Bandar Estek, Negeri Sembilin, will increase Kellogg’s Pringles production capacity in the Asia Pacific markets, and create at least 300 jobs, locally, the company said.
“Our acquisition of Pringles in 2012 marked the beginning of an exciting new era in the evolution of our global snacks business,” said John Bryant, president and chief executive officer of Kellogg. “The decision to invest in a new snacks manufacturing facility — and build our capacity and capability in Asia Pacific — is the next step in that journey.”
Construction of the new plant will begin immediately, and Kellogg said the investment is in line with two of its four business strategies: becoming a global snacks player and building its emerging markets footprint.
“We have a compelling business need to better align our assets with marketplace trends and customer requirements,” Mr. Bryant said. “To that end, we are taking action to ensure our manufacturing network is operating the right number of plants and production lines — in the right locations — to better meet current and future production needs and the evolving needs of our customers.”
Kellogg initiated Project K late last fall. The program will alter the company’s infrastructure and reduce its global workforce by 7%. It is projected to cost between $1.2 billion and $1.4 billion. Cash savings are expected to reach an annual run-rate of between $425 million and $475 million in 2018.
In mid-December, Kellogg announced two plant closings and one expansion as part of Project K. Those moves included the planned closing of the company’s ready-to-eat cereal plant in London, Ont., by the end of 2014 and the closing of a snacks plant in Charmhaven, Australia, by late 2014. Kellogg also said it plans to expand its cereals and snacks facility in Rayong, Thailand, by early 2015. The plant opened in 1997.