UK confectionery and beverages group Cadbury Schweppes has said it plans to reduce its worldwide workforce by around 10% and its number of factories by around 20% by 2007.

The factory closures and job cuts will form part of the group's "Fuel for Growth" initiative, which is aimed at cutting costs, excluding marketing, by £400m (US$678.3m) a year by 2007. The group currently has 133 factories and around 55,000 employees.

Cadbury said it expects the incremental investment required to deliver these savings to be £900m over the 2004 - 2007 period split broadly equally between restructuring and capital spend.

The company plans to reinvest up to one-third of the benefits from its Fuel for Growth scheme in its "Smart Variety" programme, with the aim of accelerating sales growth through increased spend on marketing and innovation.

As a result of the two initiatives, the company expects to achieve 50 to 75 basis points increase in underlying operating profit margins every year over the 2004 - 2007 period, as well as net sales value growth of between 3% and 5% every year.

Cadbury also reiterated that it expects full year performance to be broadly similar to the first half.