Mondelēz to build biscuit plant in Bahrain

by Eric Schroeder
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MANAMA, BAHRAIN — Mondelēz International has unveiled plans to invest $90 million to build a biscuit plant in the Kingdom of Bahrain, a move geared toward meeting rising demand in the Middle East and Africa for such brands as Oreo, Ritz and TUC biscuits. The facility will be Mondelēz International’s most advanced manufacturing site in the Middle East and Africa, and full commercial production is scheduled to start in early 2016.

In the initial two- to three-year phase, the new plant will operate four biscuit-manufacturing lines with a total capacity of nearly 90,000 tons per year, Mondelēz said.

“This investment in Bahrain is part of our ongoing supply-chain reinvention plan,” said Daniel Myers, executive vice-president of integrated supply chain at Mondelēz “We’re implementing several such initiatives around the world to capitalize on growing demand, while also reducing costs and improving productivity. We’re pleased with our progress in regions, such as Mexico and India, where we’ve already begun to invest.”

Mondelēz has indicated it expects to deliver $3 billion in gross-productivity savings, $1.5 billion in net savings and $1 billion in incremental cash over the next three years as part of the company’s supply-chain reinvention plan. The savings will be a primary driver of significant improvements in the company’s base operating-income margin in the near term.

“We are investing for the future and are very grateful to the government of Bahrain for its long-standing and unwavering support of our investments here,” Vishal Tikku, Mondelēz International’s area vice-president for the Middle East, said at an Oct. 1 joint ceremony with Bahrain’s Minister of Industry and Commerce, Hassan Fakhro. “We are seeing very rapid growth for our iconic brands across emerging markets, including the Middle East and Africa.”

The new plant will result in as many as 300 direct jobs by the end of the initial phase and, through a multiplier effect, help sustain over 1,000 more in the local economy, Mondelēz said.

This is Mondelēz International’s second, major investment in Bahrain. The U.S.-based company already has invested more than $75 million in developing a Kraft Cheese and Tang powdered-beverage plant in Bahrain, which has been operational since 2008. With a production capacity of 110,000 tons per year, the existing facility employs more than 240 people and has injected over $250 million in the local economy.
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