Mondelēz has initiated a consultation process to shut its New Zealand factory in early 2018 as the company said Dunedin is an expensive place to manufacture its products, ConfectioneryNews recently reported.
One of Dunedin’s city councilors, Jim O’Malley, said the reason why the city set out to save the plant was “a combination of maintaining industrial confectionery manufacturing as a skill set in the city as well as returning to the production of high quality milk chocolate for which the factory was most famous.”
He said chocolate and other confectionery products have been manufactured on the Dunedin site since 1868, making next year the 150th anniversary.
“The Cadbury’s site is synonymous with chocolate manufacturing in New Zealand and is an iconic component of Dunedin’s image,” O’Malley added.
Fundraising progress
Mondelēz originally hoped that a third party manufacturer could start production in August 2018.
"It is our intention to drive towards achieving 300 jobs within the next 10 years and in doing so restore the manufacturing capacity back to its original size." - Jim O'Malley
However, the company was concerned that Dunedin Manufacturing Holdings, of which O’Malley is a part, would not be able to raise the NZ $20m ($14.44m). The price is the estimated amount required to buy the plant and equipment, and to take on the manufacturing of the Cadbury products currently marketed in New Zealand, such as Jaffas, Buzz Bars and Pinky Bars, according to O’Malley.
Dunedin Manufacturing Holdings came up with a landing page on, named OwnTheFactory, in an effort to assess public support and commitment to a proposed equity float.
People, who plan to commit to the equity float, can come to the website and enter the amount they intend to invest with pledges which range from NZ $50 ($36.09)- NZ $200 ($144.36) to NZ $50k ($36k)- NZ $200k ($144.36k), O’Malley said.
“The intention is to see how close to the required NZ $20m (in two weeks starting June 7, 2017) we can get with this approach and using the publicity that comes with it to move onwards to attracting larger cornerstone investors to take us the rest of the way to the NZ $20m,” he added.
By June 13, 2017, the city had raised around NZ $4.5m ($3.25). However, “we have already attracted the interest of wholesale investors – individuals who can invest NZ $1-5m ($0.7m to $3.6m) into the venture,” O’Malley said.
“In addition, the Dunedin city council has now expressed interest in underwriting at least some of the NZ $20m.”
Bringing back manufacturing jobs
The production at the Cadbury site is not particularly important in economic terms, “when put in the context of the city’s GDP of NZ $4bn ($3.89bn),” O’Malley pointed out.
However, the loss of 360 jobs with the Cadbury factory marked a large employer leaving the city, he said.
“So saving the capability to continue manufacturing confectioneries and chocolate is important in the context of maintaining Dunedin as a significant manufacturing city in New Zealand,” O’Malley said.
“Our effort will only save 25 jobs at first and will expand to 69 within a few years,” he said. “But it is our intention to drive towards achieving 300 jobs within the next 10 years and in doing so restore the manufacturing capacity back to its original size.”