HERSHEY, PA. — The Hershey Co. has announced its project Next Century as a part of the company’s efforts to create an advantaged supply chain and competitive cost structure. The investment includes a $200 million to $225 million plant expansion of the West Hershey facility and about $50 million to $75 million in distribution and administrative facilities in Hershey.
“Next Century will ensure that we continue to make the world’s best chocolate and are well-positioned in the marketplace,” said David J. West, president and chief executive officer. “Our investment will create a highly flexible, cost-effective manufacturing facility that will enable us to remain competitive with global players while satisfying the needs of retail customers and consumers.”
The project includes plans to transition from the century-old facility at 19 East Chocolate Avenue to a planned expansion of the West Hershey Facility. The transition will cut about 500 to 600 jobs as technology and automation will lead to increased efficiency, Hershey said.
The company believes the program will incur pre-tax charges and project implementation costs of $140 million to $170 million during the next three years. The estimated annual savings after the completion of the program are expected to be $60 million to $80 million.
“Our recent marketplace performance has been driven by the investments we have made in our brands and our global capabilities, fueled by our strategic focus on supply chain efficiency and effectiveness,” Mr. West said. “Savings from project Next Century will enable us to continue making investments that will deliver core business growth and position us for long-term success in the global confectionery marketplace. We must continue to look at all options that provide us the flexibility to make the investments necessary to ensure that Hershey is as successful in this century as it was in the past century.”