Kraft Food: The decision to close down Brasov-based production facility is not related to financial crisis

The company will reduce workforce by 440 by yearend

The fast-paced development of Kraft Foods business, the leading chocolate and food producer in Romania, has generated additional necessities of enhancing the production capacity, which were not possible at the factory in Brasov.

“Due to space restrictions in the existent buildings and location of production facility of Kraft in the city center, enhancement of production capacity at Brasov is not a viable option. There have been examined all production capabilities at our factories and opportunities to strengthen production activity in order to provide the required size to support a further development”, said Doina Cavache.

According to Kraft representative, the company has closely analyzed other possibilities that would have allowed the expansion of the production capacity and upgrade operations, but it did not find any “option viable to meet these demands in a feasible and sustainable way for Romania”, Doina Cavache added.

Relocating production from Brasov to Bulgaria was due to expansion capacities, in the existent location, of chocolate factory in the region, and to the proximity that makes the relocation feasible in terms of logistics. As for the production transfer from Kraft Foods unit from Brasov and in the region, Doina Covache said no decision has been made.

“The approximately 440 employees at Kraft Foods factory in Brasov will be discharged by the end of 2009. The lay-off procedure will be carried out in several phases. In the following period we will negotiate with the union to draw up the compensatory pay package. We will collaborate with our employees during this difficult period. We will offer them an advantageous compensatory pay package and assistance in finding new jobs in order to make the transition period as easy as possible,” said Doina Cavache.

Doina Cavache stressed that Kraft Foods business will not be affected by the shutdown of the production facility in Brasov.

“The relocation of production will not affect the quality of our products or our promise to continue investing in our brands and in the business. We will focus on our brand portfolio in coffee and chocolate segments. This year we entered the biscuit segment, which we intend to develop”, said Kraft Foods representative.

Evaluated last year at over 186 million euros, Kraft Foods Romania is the leading chocolate producer in the market, its best sold brand, Poiana registering sales of over 350 million chocolate bars since its launching, in 1995 up to now.