Kraft Foods Australia yesterday announced the closure of its facility in Broadmeadows, Victoria, as of March 31, 2006. The facility employs 151 people.

Kraft says the closure of the biscuits facility, built in 1964, is a result of an ongoing company-wide business review. The review is looking at how the company can accelerate its competitiveness in the Australian food industry, through improvements and optimization across all key activities, and in line with Kraft’s global vision for sustainable growth.

Kraft will move manufacturing of biscuits, including brands such as In A Biskit, Premium, and Captain’s Table, to a regional facility in China and outsource the distribution of biscuits in Australia to a third party logistics provider.

Since the acquisition of this business in 2002, Kraft Foods says it has worked to improve the performance of the Broadmeadows facility, safety of employees and quality of products while reducing costs.

However, the review has shown that the facility lacks scale and manufacturing costs remain too high for the facility to remain sustainable within the highly competitive biscuits category.

Kraft Foods Vice President and Area Director for Australia/NZ Chris Bell said, "This is the right decision for the business overall and has only been taken after a thorough analysis. Kraft is especially mindful of the impact this decision will have on our employees, as we greatly value the support that all our employees give to Kraft Foods Australia. We will ensure that all affected Broadmeadows employees are given access to every support during this difficult period, and they are guaranteed to be paid their appropriate entitlements, including a redundancy package. Employees will also have access to comprehensive career transition support services."

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