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Mexican move for confectionery firms saves labour and sugar costs

02-Mar-2009

Related topics: Supply Chain

Confectionery firms are moving to Mexico and Canada to save on labour and sugar costs, reports US paper, York Daily Record.

Hershey chocolate firm recently closed a plant, with about 260 job losses, in Reading, US, shifting confectionery lines housed there to other plants in the US, Canada and Monterrey, Mexico.

The article, published this week, cites data from manufacturing location consultants The Boyd Company that, in its "BizCost.com Comparative Confectionery Industry Manufacturing Costs 2008" report found total annual labour costs for a 150,000-square-foot confectionery plant employing 300 workers in the Hershey/Lebanon area was about $15.2 million (€12.7m).

Total annual labour costs for the same plant in Monterrey, Mexico were $3.3 million (€2.62m).

And in terms of sugar costs, sugar producers in the US charge 21-cents per pound, said John H. Boyd, the Boyd Company president cited in the York Daily Record article. In Mexico and Canada, sugar sells for about 11 cents per pound, he added