UK: Cadbury to wield axe in radical restructuring

By: just-food.com | 19 June 2007

Cadbury Schweppes said this morning (19 June) that it would axe 15% of its workforce as part of a sweeping cost-cutting drive that it hopes will reshape the business.

Cadbury, the world's largest confectioner, also plans to close 15% of its manufacturing facilities around the world over the next four years.

The company, maker of brands including Dairy Milk and Trident gum, also shed more light on the future of its drinks business in the US.

In March, Cadbury said it would either sell or demerge its Americas Beverages operations, which produce brands such as Dr Pepper and 7Up. Today, the company said that a sale "is the more likely outcome".

Cadbury outlined its plans for its confectionery business following the expected sell-off of the drinks operations. The company is to be renamed Cadbury plc and will aim for annual sales growth of up to 6% through organic growth and bolt-on acquisitions.

"We believe the business has significant under-exploited potential," the company said. "Our new strategy aims to leverage our scale and category benefits to realise this under-exploited potential to deliver superior returns for our shareowners."

The company said its cost-cutting programme would lead to a restructuring charge of around GBP450m (US$892.7m) and confirmed plans to run itself under four geographic divisions.

Cadbury has also made a move to expand its outsourcing deal with Swiss chocolate group Barry Callebaut.

The two companies have signed an MOU on the outsourcing of cocoa products and chocolate production to Barry Callebaut. The agreement is expected to lead to Barry Callebaut handling the liquor and liquid chocolate for Cadbury's Polish plants. The deal will result in the Swiss firm supplying over a third of Cadbury's liquid chocolate needs.

Companies: Cadbury Schweppes, Dairy Milk, Barry Callebaut