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Lotte to sharply boost chocolate output capacity in Japan www.asia.nikkei.com
TOKYO -- In response to robust demand, Lotte Holdings will spend about 32 billion yen ($288 million) to set up a chocolate ingredient plant in Japan, aiming to increase its overall chocolate production by roughly 40%.
The facility, which is expected to reach full operation in June 2019, will be situated on the premises of Lotte's mainstay Urawa production plant, in Saitama Prefecture. The snack maker, a key part of the Lotte business empire straddling Japan and South Korea, hasn't made an investment of this size since the 1960s, when it opened the Urawa factory.
The new plant will produce the intermediate ingredient for chocolate. The plant's output will be used to make such finished products as Ghana Milk Chocolate and Choco Pie. This will enable Lotte to lift its annual chocolate production capacity to about 110 billion yen in sales value.
Chocolate products touting health benefits have grown increasingly popular in Japan. With many chocolate makers rolling out snacks with high cacao content and probiotics, sales to middle-aged and senior consumers have been brisk. According to industry group All Nippon Kashi Association, the Japanese market for chocolate grew 18% over five years to 526 billion yen in 2016, based on retail value. Lotte decided on the major factory investment on expectations that demand will continue to grow, particularly for chocolate products featuring health-promoting ingredients.
Rivals are also ramping up production. In September, Meiji Holdings' core subsidiary spent over 500 million yen to double the production capacity of chocolate with high cacao content at an Osaka plant. Also last fall, Ezaki Glico more than doubled the output volume of Libera chocolate, which the company claims helps hold down fat and sugar absorption.
Lotte is separately working on increasing ice cream production as well. Its Lotte Ice Cream unit plans to install a 7 billion yen production line at the Urawa factory, with the goal of bringing it on line as early as fiscal 2018. With some upscale ice cream brands selling well even in winter, the confectionery maker hopes to capitalize on the strong demand.
Published Date:2017-05-18
