Historic Company Modernizing with Next Century Project

Hershey Co. announced on Monday that it will move from its historic 19 East Chocolate Avenue location to its expansive West Hershey plant, which was built in 1992, because it wants to modernize its supply chain. This noteworthy company determined that it needed to update its factory because the new facility will be more efficient and cost-effective.

While the century-old 19 East Chocolate Avenue facility is a significant part of Hershey’s history, the company realized that it will save them money and time in the future if they move. The East Avenue facility will still be occupied by Hershey office employees, but production will move to the other location. David West, president and CEO says: “The 19 East Chocolate Avenue factory is a proud part of our heritage, but the facility simply cannot be modernized to meet the manufacturing needs of a 21st century business.”

This long-term project, entitled the Next Century Project, will initially cost Hershey Co. between $250 million and $350 million, but by 2014 the company will be saving an annual $60 million to $80 million because of the updated supply chain efficiencies. Hershey anticipates that their net sales will rise %6-%7 in 2010.

“Next Century will ensure that we continue to make the world’s best chocolate and are well-positioned in the marketplace,” said David J. West, President and Chief Executive Officer, The Hershey Company. “Our investment will create a highly flexible, cost-effective manufacturing facility that will enable us to remain competitive with global players while satisfying the needs of retail customers and consumers.”

The new facility will produce Hershey’s Kisses, Hershey’s syrup, Hershey’s milk chocolate, and milk chocolate with almond bars.

While Hershey is modernizing their supply chain and moving forward, many employees will be left behind. Between 500 and 600 jobs will be cut, which ultimately is part of Hershey’s savings plan.

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