AP Factory to be Mondelez’s Hub for India, Other Markets
The technology we are putting up in our Sri City factory is one of the first ‘Lines of Future’
Mondelez International plans to make India one of its global production hubs, says Daniel Myers, vice president for integrated supply chain. In an interview to Neha Tyagi, Myers says India is one of the critical markets for the company that sells Cadbury Dairy Milk chocolates and Oreo biscuits. Edited excerpts:
Post Nestle’s Maggi crisis, what have you learnt about the Indian market? One of the strengths of our company from a heritage point of view has been safety. And we have a whole separate group that audits our facilities. We work closely with governments, partnering with them to develop food and drug administration guidelines.
Several global companies find the state of infrastructure in India a huge roadblock to growth... From the time I have started working in India, the infrastructure has improved. We are investing clearly to have more world class manufacturing across India. We have invested almost $200 million in our Sri City (Andhra Pradesh) factory. In addition, in the last three years, we’ve spent well over a $100 million in our existing facilities. So, it’s important to us that we partner with the Indian government. Our manufacturing lines have competitive advantage. The technology that we are putting up in our Sri City factory is one of the first ‘Lines of Future’ that we have put anywhere in the world. We are focusing on reinventing our entire manufacturing network.
Does that mean you will stop outsourcing manufacturing in India? We will continue to use some contract manufacturing. We make most of our products internally as we develop the market. The plant will initially be making the Cadbury chocolates, and have land to build other categories. We expect the site to continue to grow with other categories. We also plan to use the site for export as well in the future — so, it will be a hub not only for India but also for our other markets. Our focus right now is not only building a chocolate operation, but setting out also the entire supply chain which will aid logistics and distribution as well as partnering with our suppliers to bring them into the Sri City area.
Will the raw materials be sourced from within India? We source some of our cocoa from India. Our demands are so large that we also import cocoa from around the world. Majority of our packaging is from within India and we are investing to grow cocoa production in India. Majority of our materials will be local, especially in the packaging area, and we are trying to maximise cocoa supply in India. But we still will be importing some products from around the world.
How can your Indian experience come handy for other markets, especially emerging countries? I would say the talent from India is amazing. Across our plants in India, workforce is outstanding whether that is IT, quality control or cost improvement. Many of our Asia team leaders are from India. We just transferred one of our top development directors, Arjun Bhowmik who was actually leading the building of our Sri City Factory, to North America to expand our chocolate business.
Mondelez is still a chocolate company in India with very little focus on healthy products. When will that change? Clearly, the whole area of health and wellness is of key priority for us… We are investing in products that are healthier. We don’t disclose when we are launching new products into India, but it will be our desire to bring those products over time into India. It is part of our strategy to get those healthier products into all of our critical markets around the world and clearly India is one of them.