Mondelez International says it has cut at least two months from the supply-chain lead time for a key ingredient used in Cadbury chocolate. The U.S. snack maker has opened a $22 million facility in Shah Alam, Malaysia, to produce chocolate crumb locally instead of importing it from Australia and South Africa.
Nitin Binnani, vice president of integrated supply chain for SEA at Mondelēz International, told CNBC that producing directly in Shah Alam removes at least two months from the company’s lead time. He said the new site should also reduce import and transportation costs as Mondelez prepares for volume growth across Southeast Asia in the coming years.
According to Binnani, Shah Alam is Mondelez’s only Cadbury manufacturing hub for Southeast Asia. The site produces more than 130 varieties of chocolate and around 100 million bars a year.
The company said Southeast Asia already plays a broader role in Mondelez’s global manufacturing network, with individual plants serving both domestic and international markets. Binnani added that the region still offers further room for growth in snacking demand.
He pointed to the company’s Cikarang plant in Indonesia, which supplies products to nearly 40 countries including Australia and Japan, while Thailand operates as an export-oriented hub for gum and candy. Mondelez is also currently exporting crumb to Pakistan to help address supply disruptions caused by interrupted shipping channels.
CNBC noted that cocoa prices have eased after a record-breaking rally over the past two years. That surge had been driven by adverse weather and poor harvests, which raised costs for chocolate manufacturers.
Based in Chicago, Mondelez owns brands including Oreo, Ritz, Cadbury and Sour Patch Kids. CNBC also noted that Mondelez is not the only U.S. company expanding chocolate-related production in Malaysia: agribusiness giant Cargill earlier this year expanded its specialty fats facility in Port Klang, including capacity for ingredients used in chocolate manufacturing.
Formerly known as Kraft Foods, the company was renamed Mondelez International in 2012 after spinning off its North American grocery business.
