Japanese confectioner Morinaga & Co has decided to indefinitely postpone the opening of a new JPY40bn (US$37m) factory due to the impact of rising raw material costs.
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Planned to be opened in Takasaki City, in Gunma, Morinaga’s decision has hit the city of Takasaki hard, as the 17.8 hectares site had promised at least 500 jobs in the run-down area.
“It is unfortunate and we can apologise profusely to the people of Takasaki city but hope they will understand given the difficulties facing the Japanese food industry at present,” a spokesman for the company told just-food.
Analysts believe the move is in line with the company’s efforts to move away from the domestic market and step up its efforts to boost its overseas presence.
Morinaga’s performance has slipped of late: in fiscal 2007 its pre-tax profit fell 7% to JPY11.7bn as the soaring price of flour used in its mainstay biscuit lines hit earnings by JPY2bn.
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