Hershey is shifting production from its headquarters on East Chocolate Avenue in Hershey, Pa., to improve its manufacturing and distribution, an effort projected to earn up to $80 million a year in supply chain savings
It's part of the $5.3 billion candy maker's "Next Century" project to sweeten its supply chain and lower costs, but it will be a bitter move for some employees.
The company expects to shed 500 to 600 jobs in the shift from downtown Hershey, where it's been manufacturing candy since 1897, to a West Hershey plant.
The plan includes $200 million to $225 million in spending to modernize and expand the West Hershey plant and up to $75 million to upgrade the Hershey site.
That will improve distribution as well as manufacturing, the company said.
"The 19 East Chocolate Avenue factory is a proud part of the company's heritage, but the facility is over 100 years old," said David J. West, president and CEO.
By 2014, the move will save Hershey about $60 million to $80 million a year, the company said. The East Chocolate Avenue site will become an administrative center.
The move was announced after Hershey reached a tentative labor agreement with the unions representing workers at its Hershey and West Hershey plants.
Hershey's, the nation's largest chocolate manufacturer, increased net sales 13.9 percent in the first quarter, while reducing inventories 7.3 percent.
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