Fonterra opens revamped application centre in China as Nestlé mulls closure of UK confectionery factory

CHINA – New Zealand multinational dairy co-operative Fonterra has opened its revamped application centre in Guangzhou, China, in an effort to support its growing foodservice business in southern China.

Fonterra says the revamped center is more multipurpose than the previous one and will see the test and development of innovative products and applications unique to the ‘fast-moving’ China market.

The premise will also enable the co-operative’s teams to hold more than 70 large demos and 150 small demos each year.

“This updated application centre is a great enabler for our Greater China business, by helping us bring our products to market faster and better,” said Justin Dai, VP for Foodservice Fonterra Greater China. 

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The dairy giant noted that the decision to expand the centre was based on growth in Guangzhou, part of the ‘Greater Bay Area’ region in China, with the team outgrowing the existing premises.

Fonterra’s other application centres are located in Beijing, Shanghai, and Chengdu.

During the covid-19 pandemic, Fonterra was able to Leverage these R&D centres to able to bring some exciting new products to market including: cheese lollipops, different types of yogurts and three new ambient cream products.

The dairy cooperative now has plans to open another in Wuhan this year. 

Nestlé to close UK confectionery factory

Meanwhile in the UK, Nestlé has announced plans to close its factory in Fawdon, Newcastle, as part of a broader set of proposed changes to its UK confectionery manufacturing which aim to create a more efficient manufacturing footprint

The planned changes will see production at Fawdon moved to other, existing Nestlé factories in the UK and Europe, and the site would close towards the end of 2023.

The proposed changes also include a total £29.4 million (US$40.8m) investment at its factories in York and Halifax.

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According to the company, £20.2 million (US$28.03m) will be used to increase KitKat production at its York factory and modernise the site while £9.2 million (US$12.77m) investment will be used to equip the Halifax factory to enable it take on the largest portion of Fawdon’s current production.

Nestlé says that its Fawdon factory is home to many smaller, low-growth brands and employs a diverse and complex mix of production techniques, while its factories at York and Halifax have clearer specialisms and manufacture some of the company’s biggest brands.

If the proposals go ahead, Nestlé expects to be manufacturing a higher volume of products overall in future, while operating a smaller number of factories.

The UK confectionary changes came barely a month after Nestlé announced a proposal to cease confectionery production at its Wiri factory in New Zealand.

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