Cloetta has announced it will not proceed with the Greenfield plant project in Netherlands. Reasons sighted include increased energy supply risks and the permitting process that was still underway.
The indicated permitting phase precedes the construction phase of most – if not all, construction projects. This would have so far been Cloetta’s largest single investment.
Greenfield facility on hold last year
The leading confectionery company in Northern Europe had announced the stalling of the Greenfield facility in September last year. This meant the project’s construction and related infrastructure investments were put on hold.
Reason for this was reassessment of the mentioned risks among other investment parameters. Including the relatively limited investments and opportunities in their supply chain to compensate for their input to the project.
“As the greenfield project is still in an early phase, investments have so far been relatively limited. Furthermore, there remain opportunities in our existing manufacturing network to compensate for the volumes planned to be produced by the greenfield in the mid-term. This is the right time to reassess if there are better alternatives to secure a more efficient manufacturing structure to support Cloetta’s long-term profitable organic growth and environmental footprint”, commented Katrina Tell, President and CEO at Cloetta.
Reasons sighted for the need for reassessment span from the rising inflation in Europe to increased geo-political uncertainty with regard to energy supply.
The pull-back is however not all gloomy and bleak as the Q1 2025 market for the company will stand to gain. This will be accounted for by the reversal of capital and borrowing costs that were directed to Cloetta’s Greenfield plant project.
Cloetta’s Greenfield plant project announcement in 2022
The investment announcement to keep-on-track the Greenfield facility was made in 2022. Also included in the announcement was the closure of three more facilities in the Netherlands and Belgium. This would have seen the confectionery company make its seventh production unit but we will now stick to the six spread out in five European countries. Cloetta, Jenkki, and CandyKing are some of their brands on the market.
