The investment is part of the group’s expansion plans for the Europe, Middle East and Africa (EMEA) region, according to senior company representatives.
The producer has obtained a permission to invest in the Kutno subzone of the Łódź special economic zone (ŁSSE). Under the plan, Kellogg will expand its existing facility, which will be fitted with additional production capacities to make Pringles.
Locating its investment in a special economic zone will enable Kellogg with preferential tax treatment for the project. In return, the manufacturer will be obliged to maintain a declared workforce in the coming years.
“This marks the fourth undertaking of the US company in the Kutno subzone of the Łódź SSE,” the zone said in a statement.
“In terms of its value, according to the declared amount [that is to be invested by Kellogg], this is the largest investment project in the history of the Kutno subzone”.
Investment part of expansion strategy
Gráinne O’Brien, director of external communications and brand PR for Kellogg Europe, told BakeryandSnacks that the purpose of launching the new production line in Kutno is to help the company meet the growing demand for Pringles across the EMEA region.
“The brand is experiencing double digit growth across the region, so we need to increase our current production capability,” she said.
“Approval has been given to begin the installation of a new Pringles line in the existing Kutno facility, which will help us to meet growing demand for Pringles across the region and increase our current capacity.”
“We are currently in the planning application phase and subject to planning, we hope to commence construction [this year], for completion in late 2020.”
Asked how the investment in Poland fits into the producer’s expansion strategy for the Central-Eastern European region, O’Brien said, “Increasing our production capacity at Kutno will greatly enable Kellogg’s ability to continue to meet the significant growth we have experienced, not only in the CEE area, but within the wider EMEA region.”
Diversify product portfolio
In a bid to diversify its product portfolio, in May 2012, Kellogg completed the acquisition of the Pringles brand from Protect & Gamble under a deal worth $2.695bn.
As part of the transaction, the group took over the manufacturing resources in Jackson, Tennessee, and Mechelen, Belgium.
However, the company announced in late 2018 it was considering the sale of its cookies business, including brands such as Keebler, Famous Amos, Mother's and Murray, and its fruit snacks business, including the company’s Stretch Island brand 'to enable [it] to bring a sharper focus to its core businesses.’
“Kellogg Company’s Deploy for Growth Strategy, announced earlier [in 2018], calls for the company to sharpen our focus and align our resources around our biggest opportunities to grow our top line and return to long-term sustainable growth,” added Steve Cahillane, chairman and chief executive.
Kellogg has been active in the Polish municipality since 2007 through subsidiary UMA Investments Ltd, which operates facilities in Kutno.
The Pringles factory was opened in 2014 and a year later, construction work was launched on a logistics centre.
The 13,000m2 (13,9930 square foot) facility was developed by Panattoni Europe and consists of a packaging zone, a storage zone and offices.