January 26, 2006
Jelly Belly serves up international flavor with Thailand factory
By Christine Cube
FAIRFIELD - Jelly Belly Candy Co. is about to take on the world.
The sugar icon is expanding overseas, marking the first venture of the privately held company to manufacture its products on international soil.
In Rayong, Thailand, Jelly Belly will build a 50,000-square-foot facility with a capacity to expand to 175,000 square feet. The Fairfield plant is nearly 500,000 square feet.
Construction hasn't begun. The plan is to be on the ground in another quarter with actual candy production under way by early 2007, said Herman Rowland Sr., chairman and chief executive officer of the company.
This is big news for Fairfield's candy cluster, which was dealt a blow earlier this week with the announcement Thompson Brands is packing up its operation and consolidating everything at its headquarters in Meriden, Conn.
Jelly Belly's plant in Thailand won't have any effect on operations in Fairfield or at the company's facility in Illinois. Rowland remains committed to those operations, maintaining he "definitely will continue to grow operations in America."
The Thai plant strictly will serve the international market, specifically targeting Asia, Europe and Australia. So far Jelly Belly has had limited dealings worldwide - just 8 percent of its products are sold for export.
"For several years, we've been trying to improve our position internationally to sell more product throughout the world," Rowland said. "The cost of manufacturing it here in the United States - the sugar, labor, material, regulations - all of those things cost."
Take the price of sugar.
Sugar here costs 35 cents a pound, he said. Internationally, it could be as low as 12 cents.
As a result, many candy companies have left the United States, taking their business to Mexico, Canada and South America. Rowland mentioned Life Savers, which closed its plants across the country and is now doing business around the world.
The Hershey Co. (NYSE: HSY) is another candy icon that has taken its company global.
Hershey Chocolate North America is among the nation's domestic producers of chocolate and confectionery products with brands including Hershey's, Kit Kat, Twizzlers and Jolly Rancher. Hershey's international arm oversees global interests and exports to more than 90 countries.
Today, Hershey reports annual net sales of $4.4 billion and employs 13,000 people worldwide.
Jelly Belly started out as Goelitz Confectionery Co. in 1898.
Each year, the company produces 40 million pounds of candy, including its famous gourmet jelly beans, chocolates, gummies and sour candies. It reports roughly $130 million in sales every year.
Rowland said he likely will have 50 employees to start with in Thailand.
"It's a terrific project," he said. "I feel so relaxed about getting this built and running that I can't believe it. We have such a phenomenal crew."
Jelly Belly's strategy speaks volumes of the company's future, Fairfield officials said.
"It's a very positive sign," said Karl Dumas, economic development project manager for Fairfield. "It also puts our name out there overseas . . . (Herman) is really still committed to this marketplace. You don't find very many companies and very many people like that. He maintains and holds true to his commitments."
Reach Christine Cube at 427-6934 or email@example.com.
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