Cloetta, a prominent player in the Swedish food manufacturing industry, has announced the indefinite suspension of its plans for a new confectionery plant in the Netherlands. This decision comes on the heels of “increased risk relating to energy supply” and persistent permitting challenges.
Initially, the Candy King pick-and-mix brand owner revealed its intention to pursue a greenfield investment in 2022, coinciding with the closure of three existing confectionery facilities across the Netherlands and Belgium.
However, in September, Cloetta’s president and CEO, Katarina Tell, decided to pause the investment in the Netherlands plant while the company undertook a comprehensive “reassessment” of the project, exploring “alternative options to secure a more efficient manufacturing structure.”
The review concluded that Cloetta could sustain long-term financial and operational flexibility without the need for a new facility.
Moreover, Cloetta emphasized that its existing supply chain can accommodate the production volumes initially intended for the Dutch plant in the mid-term. This strategic pivot will enable the company to concentrate on enhancing its current operations and contract manufacturing capabilities, including upgrading its existing facilities.
In her statement, Tell remarked, “With this decision, we create the opportunity for a fit-for-purpose supply chain, enhance our possibility to strengthen our market presence and grow our product portfolio, and ensure continued strong consumer engagement.”
Consequently, Cloetta anticipates a one-time net gain in the first quarter of 2025 as a result of scrapping the project.
The confectionery maker elaborated, “Approximately Skr140m ($12.8m) will be recognized as a gain in items affecting comparability and approximately Skr10m recognized as a cost in net financial items.”
This latest development follows Cloetta’s decision to divest its Nutisal roasted nuts brand to The Monchy Food Company for €5m to €6m ($5.4m to $6.5m), enabling the company to concentrate on its core confectionery brands.
In January, Cloetta reported net sales of Skr8.61bn for the full year 2024, reflecting a solid 3.8% year-on-year growth.
Furthermore, adjusted operating profit rose by 13.9% for the year, amounting to Skr910m, while net income increased by 9.2%, reaching Skr477m.