USA: Brach's to phase out Chicago candy factory, contract out more
Brach's Confections - makers of StarBrite Mints, Milk Maid Caramels, Maple Nut Goodies and nearly 200 other varieties - plans to shut down its nearly century-old factory complex in Chicago by the end of 2003, the company said.
No more than 160 of the 1,100 local employees will be laid off this year in the phase-out, the company said, citing competitive pressures, its old facilities and the company being locked into higher-cost domestic sugar with its government-backed support prices for growers.
Brach's said it is committed to regaining a leadership role in the "changing global candy industry" and the local shutdown is one stage of that strategy.
The company also said it will outsource much of the production of its current and future candy offerings to U.S. and foreign factories during the next three years.
"We are focusing renewed attention and investments in product development and brand-building sales and marketing activities," said Kevin Kotecki, Brach's president and chief operating officer.
The phased shutdown in Chicago is expected to terminate all 1,100 local jobs by year-end 2003, but Kotecki said the company's executive team would continue to be based in Chicago. Its corporate headquarters is in Chattanooga, Tenn.
Brach's, founded in 1904 by Emil J. Brach, intends to transfer some of its Chicago production to its two other factories as an interim move in its new strategy, company publicity spokeswoman Kristin Deutmeyer said.
Brach's is talking with a number of different companies for candy-making contracts to produce its nearly 200 candy varieties, but it's still early in the discussions, and no agreements have been reached, she said. Still privately held, the company produces fruit snacks, chocolates and hard candies.
In the fast-consolidating candy industry, and its adoption of Internet sales options, Brach's is the 20th largest confectioner in the world and seventh biggest in the United States, according to Candy Industry magazine.
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