Kraft shifts production to Argentina

Kraft, the largest food company in the US, has announced that it will shift production of its Royal Brand puddings from Brazil to Argentina.

According to a Dow Jones report, Kraft will start to produce the puddings at a plant located in San Luis, about 700 kilometres west of Buenos Aires.

The decision comes just three years after Kraft first shifted its pudding production from Argentina to Brazil in 1999. Then the decision was made because Argentina's peso was pegged to the US dollar, making it uncompetitive for the export of its puddings. Now, following President Eduardo Duhalde's decision to devalue the peso at the beginning of January, the Argentine currency has lost 70 per cent of its value making the country a far more viable option for manufacturers of export products.

Kraft said the new plant in San Luis will be used as the hub for exportation of its puddings to the rest of the Southern Cone region of Latin America.