The fate of a $130 million investment to support Mondelēz International’s biscuit manufacturing lines has been decided. The company, which in mid-May said it was debating whether to invest in its Chicago facility, which opened in the 1950s and was remodeled in the early 1990s, or in a new facility in Salinas, Mexico, has opted for the latter.
The investment will be used to install four manufacturing lines, dubbed “Lines of the Future,” at the company’s Americas production facility in Salinas, which opened late last year. The new lines are expected to be completed by the middle of 2016 and will replace nine older, inefficient manufacturing lines at the company’s Chicago biscuit plant.
The announcement builds on the company’s earlier manufacturing investments of more than $170 million in manufacturing lines at its U.S. biscuit plants in Fair Lawn, N.J.; Naperville, Ill.; and Richmond, Va., as well as additional investments in recent years in technologies and capabilities within its North American supply chain.
“This new investment is part of our ongoing supply chain reinvention plan, as we implement several initiatives around the world to transform our global manufacturing processes to accelerate growth, reduce costs and improve productivity,” said Daniel Myers, executive vice-president of integrated supply chain. “These investments will enable a significant percentage of our global Power Brands to be produced on advantaged assets and are key contributors to our overall margin improvement.”
Even as Mondelēz phases out production lines in Chicago, the company said the site will remain an important North American manufacturing facility.
“The Chicago plant has been and will continue to be an important part of the company’s North American biscuit footprint, producing a variety of beloved consumer products,” said Olivier Bouret, vice-president of North America integrated supply chain, biscuits. “While the new investment will affect approximately 600 positions in Chicago, we’re committed to treating all impacted employees fairly through this difficult time.”
Mondelēz said the Chicago plant will continue to be one of the company’s largest North American manufacturing facilities in terms of headcount, and the company plans to continue to invest in capabilities, technologies and infrastructure upgrades at this facility.