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Companies

Wrigley ups stake with Sh5.8 billion chewing gum plant

From left: Wrigley Global President Martin Radvan, Machakos Governor Alfred Mutua, Industrialisation secretary Adan Mohamed and US Ambassador Robert Godec look at a  model of the Wrigley plant during the ground-breaking April 8, 2015. PHOTO | COURTESY
From left: Wrigley Global President Martin Radvan, Machakos Governor Alfred Mutua, Industrialisation secretary Adan Mohamed and US Ambassador Robert Godec look at a model of the Wrigley plant during the ground-breaking April 8, 2015. PHOTO | COURTESY 

Multinational chewing gum manufacturer Wrigley Company has broken ground for a new Sh5.8 billion factory in Mavoko as it aims to double its production capacity and cement its leading position in the market.

The Chicago-based firm, which produces Big G, PK, Doublemint, Juicy Fruit and Orbit brands, says the new plant will be operational by April, 2017 and will see its annual output double to 7.84 billion pellets.

Euromonitor International places Wrigley East Africa as the market leader in Kenya’s chewing gum industry with a 75 per cent market share, a position it is now likely to defend or bolster once production at the new factory commences.

“The upcoming factory will be double the capacity of our existing facility in Industrial Area,” Wanja Mwangi, Wrigley East Africa’s corporate affairs manager told Business Daily, adding that the old factory will be shut upon commissioning of the new one.

“This investment in an enhanced facility gives us the chance to diversify into other types of confectionaries besides chewing gum in the future.”
The factory will increase competition in the market where Wrigley’s main competitors include Lotte Confectionery Company that has a 14 per cent share, according to Euromonitor.

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The international research firm classifies Kenafric industries in a different category from Wrigley, placing the family business as the market leader in the sugar confectionery industry with a 22 per cent market share.

Kenafric, which is also in the stationery and footwear business, produces a wide range of confectioneries including chiclets, toffees, chewing gum and lollipops.

The company produces over 100 tonnes of hard boiled sweets, toffees, bubble and chewing gum daily. The firm, whose main chewing gum brand is called Fresh, in 2012 unveiled a Sh1 billion factory that was to see them upscale their production, including increasing exports.

Euromonitor says Kenya’s chewing gum industry is set to experience growth, noting that sugar-free gums will in particular benefit from an increasingly health -conscious youth.

“The higher demand for gum expected in Kenya is set to derive from higher numbers of working young adults who regard gum as a functional product which not only freshens the breath but also helps to improve overall concentration,” the research firm says.

Wrigley, a subsidiary of Virginia-based Mars, opened its maiden factory in Kenya in 1972.  It is the multinational’s only manufacturing plant  in Africa, serving Uganda, Tanzania, Rwanda, Burundi, Ethiopia and South Sudan.

The company says the plant, which is being built on a 20-acre piece of land, is in response to growing opportunities in these markets.

“Our choice of Kenya for this investment is highly intentional – Kenya has been a great host to us for the past four decades and we know it is a nation with great potential as the foremost economic and business hub in east and central Africa,” Wrigley Global President Martin Radvan said.

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