NORTHFIELD, Ill.–(BUSINESS WIRE)–Kraft Foods Inc. (NYSE:KFT – news), a global leader in branded foods and beverages, today announced plans by the Kraft Foods International business to rationalize its biscuit manufacturing operations in the People’s Republic of China (PRC) and Taiwan.

The decision to rationalize the number of plants was taken following a thorough evaluation of the manufacturing configuration required to meet the needs of consumers across the Greater China area.

Two plants located in the PRC at Hangzhou and Shekou and one plant located in Tainan, Taiwan will be affected.

The Hangzhou plant, near Shanghai, has been inactive since December 1999 and will now be closed permanently. Its equipment is in the process of being transferred to the Suzhou plant, which is also near Shanghai. The transfer of equipment will increase the capacity and efficiency of the Suzhou operation.

Production in the Shekou plant, near Hong Kong, will cease on December 16, 2001 and its products will be produced in the Suzhou and Beijing plants in the PRC.

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The Tainan plant in Taiwan will be downsized and its production gradually transferred to the Cikarang plant, near Jakarta in Indonesia. It is expected that the equipment design, procurement and installation and products transfer will be completed within 18 months. Approximately 1,000 employees will be affected as a result of the total rationalization program.

“We remain committed to growing our business in Greater China and these difficult decisions are a necessary part of ensuring that our manufacturing is optimally configured and clearly positioned for future growth,” said Hugh Roberts, Group Vice President, Kraft Foods International and President Asia Pacific Region.

“Our clear objective is to accomplish these changes with minimum impact on our employees and the business generally. Affected employees will be provided with comprehensive and fair separation packages and assistance in managing their transition to other opportunities outside the company,” continued Mr. Roberts.

Kraft Foods is the largest branded food and beverage company headquartered in the United States and the second largest worldwide. Kraft Foods markets many of the world’s leading food and beverage brands – including Kraft cheese, Jacobs and Maxwell House coffees, Nabisco cookies and crackers, Philadelphia cream cheese, Oscar Mayer meats, Post cereals, and Milka chocolates – in more than 140 countries.

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