Business

January 10, 2008

Chocolate maker has Asian aims

Swiss chocolate maker Barry Callebaut opens a $20 million factory in the eastern Chinese city of Suzhou on Wednesday.

ELAINE KURTENBACH AP Business Writer

SUZHOU, China — In a cavernous white building filled with huge bubbling vats, clattering conveyor belts and the luscious aroma of melted chocolate, a Swiss tradition is being transplanted, cocoa butter block by cocoa butter block.

Swiss chocolate maker Barry Callebaut opened a $20 million factory in the eastern Chinese city of Suzhou on Wednesday, a move aimed at capturing the growing regional taste for chocolate and other sweets — by supplying chocolate and production facilities to brand manufacturers.

Zurich-based Barry Callebaut claims a 25 percent share in the market for the raw chocolate that is processed into candy bars, cocoa and pastries, or as the company’s CEO Patrick De Maeseneire puts it, “one in every four bites of chocolate in the world.”

China’s own huge market, and its role as world supplier of just about everything, from tennis shoes to laptop computers, has made it a prime destination for legions of business-to-business suppliers.

As increasingly affluent Chinese and other Asians indulge their taste for luxury treats, companies such as Barry Callebaut are shifting operations eastward to cut costs and hone their competitive edge in supplying manufacturers based in China.

“Only with this Chinese production we are a truly global company,” Andreas Jacobs, the chocolate maker’s chairman, said at the factory’s opening ceremony.

Barry Callebaut has assets ranging from cocoa production facilities in Africa to retail candy brands in Europe and the United States. The company partners with major manufacturers such as Japan’s Morinaga & Co., Cadbury Schweppes PLC, Nestle SA and Pennsylvania-based Hershey Co.

Barry Callebaut SA opened its first Asian factory in 1997, in Singapore, but decided in 2005 that it had to have a presence in mainland China if it wanted to remain a top global player. In 2006, it settled on building the factory in Suzhou. The factory began operations just a year later.

The wholly-owned factory is the chocolate maker’s first in China and is part of a strategy aimed at significantly expanding in Asia.

Jacobs and other executives said the company does not plan to offer its own-brand products directly to consumers. Instead it will sell to other companies, while also cultivating a fast-growing business in supplying high-end customers such as luxury hotels and patisseries.

It also will offer production facilities for other companies.

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