Cloetta, the Sweden-based confectioner, has revealed it is to close a domestic nuts facility at Helsingborg and outsource manufacturing to an unnamed third party.
Some 25 people will be impacted by the decision.
The company, which issued a profit warning last month as factors linked to Covid-19 weighed on sales, said it has taken the decision to “improve its competitiveness”.
It said the initiative is expected to generate savings of up to SEK10m (US$1.1m) on an annual basis and incur approximately SEK15m in one-off restructuring costs.
The factory is the only one producing nuts for Cloetta, with brands such as Nutisal and Parrots.
Henri de Sauvage-Nolting, president and CEO of Cloetta, said: “The third-party supplier was selected after a rigorous process evaluating a wide range of suppliers and their ability to maintain a clear focus on safety, quality and delivery.
“Through the outsourcing we will improve our competitiveness and offering within the nuts segment as well as get access to new technologies. Furthermore, the initiative enables us to streamline our own production to focus on categories in which we possess strong internal knowledge and expertise.”
The plan is to close the Helsingborg facility early next year. Negotiations have been initiated with the local unions in regard to the 25 employees affected by the decision.
De Sauvage-Nolting added: “A decision to close a factory is not taken lightheartedly and we will support our employees in their transition to new jobs. However, we are active in a highly competitive market and must therefore constantly review our ability to drive improvements across our business.”
The nuts segment accounted for 4% of Cloetta’s total sales in 2019.