Cloetta Considers Closing Factory in Dieren

20 Nov 2015 --- Cloetta’s acquisition of Locawo B.V. (Lonka) in July 2015 will make it possible to create cost savings.

Cloetta is active in a highly competitive market and must therefore constantly be cost effective. The acquisition of Lonka creates synergies in administration, sales, procurement and supply chain. Cloetta has evaluated how cost savings can be achieved through the closure of the factory in Dieren, the Netherlands. The factory has 34 employees.

It is Cloetta’s intention to close the factory in Dieren at the end of 2016 and transfer production to the factory in Levice, Slovakia. The factory in Levice will be extended as part of the transfer. The transfer will also make it possible to insource additional production to the factory in Levice.

The proposed closure of the factory and transfer of production would give rise to one-off costs and capital investments totalling approximately SEK 120m. The bulk of the one-off costs and capital investments will occur in 2016.

The closure of the factory in Dieren, insourcing of production and synergies in administration, sales and procurement from the acquisition of Lonka will generate savings of at least SEK 35m on an annual basis.

The savings will have a gradual effect in 2016 and in 2017 are expected to contribute to Cloetta’s target of an adjusted EBIT margin of 14 per cent. The full run rate of the savings is expected in 2018.

Cloetta will initiate consultations with the local works council and the European Works Council.