But the investment in two new Tassimo coffee production lines, to be installed next year, was conditional on commitments to flexibility and cost competitiveness, said the manufacturer.
The spending will boost capacity for its Tassimo single-serve beverage capsules. The system caters for a range of products, including Jacobs and Costa coffees and Cadbury hot chocolate.
Tassimo capsules produced in Banbury will be exported to Western European coffee markets in France and Spain as well as for UK outlets.
Mondelēz’s senior vice president, Integrated Supply Chain for Europe, Phil Hodges said the investment was warranted because Tassimo was a key driver of growth for the firm’s European coffee business. “The investment is part of our vision to manufacture our products on state-of-the-art lines that will enable us to meet growing demand while increasing our competitiveness,” he said. The latest spending underscored the firm's commitment to UK manufacturing, he added.
Following similar investments during the past 18 months at Bournville and Sheffield, the spending took the firm's total European investment to $1.5bn since 2010.
“This investment opportunity in Banbury is part of our ongoing supply chain reinvention plan,” said Hodges. “We're implementing several such initiatives around the world to capitalize on growing demand, while also reducing costs and improving productivity.”
Head of manufacturing at the Banbury site Paul Sinclair said the UK remained a prime location for large-scale manufacturing.
“We’re committed to securing this investment for Banbury by increasing flexibility and competitiveness,” said Sinclair. “And we’re excited about showcasing the quality we can deliver to coffee drinkers in the UK and abroad by producing Tassimo in our factory.”
Double digit growth
The Tassimo beverage system was developed in Banbury before its European launch in 2004. It uses barcode technology to calculate the right amount of water, brewing time, and temperature for the specific beverage. During the past five years, Tassimo delivered double-digit growth in Europe, said the firm.
The investment coincided with the 50th anniversary of the Banbury factory, which is the firm’s largest instant coffee plant. The factory produces 90M jars of Kenco instant coffee per year, plus other key brands such as Carte Noire and Maxwell House.
Banbury became Mondelēz International’s worldwide Centre of Excellence for soluble coffee in 1991 and for all coffee categories in 1998. Employed at the site are 150 research and development staff, including: chemists, engineers, food scientists, sensory, taste, quality and packaging experts from more than 20 countries.
Mondelēz is the second largest player in the global coffee market and the world's biggest maker of chocolate, biscuits, gum and candy. Coffee accounts for about 12% of Mondelēz International’s total company portfolio or revenue of about $4b each year.
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Meanwhile, last month the firm stepped up pressure on its 1,000 factory workers at its Cadbury Bourneville site by issuing a booklet setting out future working practices at the site.