Boston, MA 10/02/2014 (wallstreetpr) – According to reports, Mondelez International Inc (NASDAQ:MDLZ) has decided to establish a biscuit plant in Bahrain, which will cost it approximately $90 million. MDLZ is the leading gum, biscuit, chocolate and candy maker of the world. As per the inputs given by the company, demand of beloved brands like Oreo, TUC and Ritz biscuits have increased significantly in the Middle East and African Countries over the last few months. In order to cope up with the rising demand across these continents, Mondelez International Inc (NASDAQ:MDLZ) will establish a biscuit plant, which will not only increase revenues, but also the customer base of the company in the future.
Insights of the matter:
If everything goes fine, then the commercial production will start in early 2016. The site of the biscuit plant will be somewhere in the Mondelez International Inc (NASDAQ:MDLZ). There are some places in Middle East and Africa where the demand of MDLZ’s biscuits is growing with double digit rate. It is planning to open its plant in such place in order to save cost and time in the distribution. First few years will be devoted towards initial set-ups; hence, the targeted production for the first two-three years will be close to 90,000 tons per year. Initially, there will be four biscuit production line, which will be increased gradually.
Management of the company is very excited about this new plant setup. Daniel Myers, Executive Vice President, Integrated Supply Chain at Mondelez International Inc (NASDAQ:MDLZ) told that the company was looking forward to re-invent its supply chain management, and this announcement was a part of that. The demand of biscuits is growing very rapidly around the world; therefore, MDLZ is planning to take many more such initiatives in different parts of the world. When it comes to expected earnings, supply chain re-invention initiative will generate around $3 billion in gross-productivity savings over the next three years. At the same time, it will generate around $1 billion in incremental cash and $1.5 billion in net savings over the same period.