The Hershey Company
) is geared to bolster its presence in the growing market of Asia
with the establishment of a $250 million confectionery plant in
Johor, Malaysia. The plant is the single-largest investment of
Hershey in the last 18 years since it set its foot in the Asian
The plant is built with state-of-the-art technology and will
carry on innovations in automated candy making technology and
high-speed wrapping machines. The location is also a strategic
fit for Hershey as it facilitates distribution to 25 Asian
The massive investment in Asia is part of Hershey's plan to
expand its global supply chain and fulfill an ambitious vision of
generating revenues of $10 billion by 2017. The plant will
manufacture four out of the five global brands of Hershey -
Hershey's Kisses, Ice Breakers, Reese's and Hershey's Milk
The plant set up in Malaysia is expected to benefit local
cocoa producers, especially those who supply the commodity to the
Although Asian countries like China, Japan, Malaysia and Korea
are currently facing macroeconomic headwinds in the form of food
inflation, lower government spending and higher taxes, consumers
demonstrate high expectations for the quality of chocolate
confectionery. They are spending on imported premium chocolate.
Hence, it is expected that the chocolate confectionery business
will have a bright future.
However, in Malaysia other chocolate makers like
Mondelez International Inc.
) and Cadbury Plc., which was taken over by
Kraft Foods Group Inc.
), occupy major shares. Hershey currently holds a Zacks Rank #3
(Hold). Another chocolate confectionery stock worth considering
Crumbs Bake Shop
), which carries a Zacks Rank #2 (Buy).
CRUMBS BAKE SHP (CRMB): Free Stock Analysis
HERSHEY CO/THE (HSY): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
MONDELEZ INTL (MDLZ): Free Stock Analysis
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