Kraft confirms plans to close Cadbury U.K. plant

by Eric Schroeder
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NORTHFIELD, ILL. — Kraft Foods Inc. on Tuesday said it will close Cadbury P.L.C.’s Somerdale plant in the United Kingdom. Kraft, which earlier this month received final approval to acquire London-based Cadbury, previously said it planned to keep the Somerdale facility open, but Kraft changed direction on Tuesday, saying plans to close the plant by 2011 already were too far along.

“It has now become clear that the investment required to reverse the closure program would be so significant that alternative plans were not viable,” Kraft said. “Cadbury has already invested more than £100 million in building new production facilities in Poland, and the majority of the lines have, or are about to be, transferred by mid of this year.”

Irene Rosenfeld, chairman and chief executive officer of Kraft, called the decision difficult, but said Kraft had to move quickly to end any further uncertainty.

“We remain committed to investing in growing our combined business in the U.K. and will continue to support Cadbury’s existing £30 million investment plans for the Bournville site,” Ms. Rosenfeld said. “During the next six months we are conducting a strategic review of our combined manufacturing network. We continue to believe that the combination of Kraft Foods and Cadbury will accelerate growth to the long-term benefit of our employees.”

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