A BEACON of hope for York’s economy has been lit by one of the city’s biggest employers which today exclusively revealed that 2009 is set to be a huge success.
That was the message from outgoing boss Paul Grimwood to his 1,900 workers at Nestle after a 2008 which saw £30 million worth of investment flood into the plant.
Today Mr Grimwood revealed the factory had contributed to the UK business winning a huge market share, with York-made KitKat sales soaring by a stunning 20 per cent.
In a message to those who have predicted that the factory will shut, he said: “We simply wouldn’t have invested the amount of money we have invested if there wasn’t a strong future for the business.
“If we remain competitive and flexible, and avoid arrogance and complacency, I can see no reason why the factory won’t still be here in 100 years’ time.”
‘I can’t see why the factory will not be here in 100 years’
YORK’S battered economy received a Boxing Day boost today as the city’s biggest manufacturer pledged it was ready to meet the challenge of tough times ahead.
Outgoing boss Paul Grimwood revealed that Nestlé Confectionery UK’s market share has risen in the past 12 months, with KitKat sales soaring by 20 per cent to make it the country’s fastest-growing top confectionery brand.
He said that as well as a £15 million investment in a new Aero factory, Nestlé had also invested another £15 million in fresh infrastructure across the York factory site, including new boilers, roads, and other equipment.
He dismissed bloggers who have predicted that the factory will be shut within ten years, saying: “We simply wouldn’t have invested the amount of money we have invested if there wasn’t a strong future for the business.
“If we remain competitive and flexible, and avoid arrogance and complacency, I can see no reason why the factory won’t still be here in 100 years time.”
Mr Grimwood said a massive restructuring of the Haxby Road factory, which included 645 redundancies and the loss of some big products such as Smarties, would be completed within another three months.
An extra 80 jobs were created earlier this year, and there are now 1,900 employees on the York site, with an additional 100 people set to work there in a new co-packing plant next year. “We’ve made the changes we needed to make in York to ensure we are fit for the future,” he said “While the outlook for 2009 is challenging for any business, we are in a strong position to face the new economic environment.”
He said the changes had succeeded in their aims of making the factory efficient, competitive and flexible.
“Previously, the business was looking backwards, not forwards, looking internally not externally at our customers,” he said.
“It wasn’t focused. And to say the working practices dated back to the 1950s would be courteous. And it was starting to impact on our market share and profitability.
“For example, three years ago, if a new order came in from, say, the Middle East or Tesco, we would have had to give 26 weeks’ notice of the changes. Now it’s down to a couple of weeks.”
The flexibility meant that neither Nestlé nor the wholesalers needed to build up stocks and risk losing the freshness of the product, and now when customers bought a product such as a KitkKat, it was likely to have been only four weeks since it was made.
He said there had also been a focus on the core brands, and the company had a “Magnificent Seven” key brands – KitKat, Aero, Smarties, the Rowntree fruit pastilles and gums, Milky Bar, Quality Street and After Eight. KitKat had been boosted by the success of the new Senses KitKat aimed at women and of crispier wafers covered in thicker chocolate.
He said market share of the “flat” UK confectionery market was up by 0.5 per cent this year, and for the magnificent seven, the share was up by one per cent. And it now exported to 30 different countries and in larger volumes. He said the recession meant that customers were buying less of the expensive chocolates at the top of the range and more mainstream chocolates, and were also buying multipacks more in a bid to make better use of tight budgets.
New role for Nestlé York chief
YORK-BORN Paul Grimwood departs as managing director of Nestlé Confectionery on New Year’s Eve to become chief executive of Nestlé UK and Ireland.
But he has revealed that he will still spend one day a week at the Haxby Road site in his new role and his family home will remain in the area.
Mr Grimwood, who was educated at Fulford School, arrived at the factory’s helm three years ago, since when he has led a massive re-structuring operation which will be completed by the end of March.
The changes have included 645 redundancies, new terms and conditions for workers, some key brands such as Smarties leaving York for good, new production facilities on the northern, modern end of the site and the end of production in old former Rowntree buildings on the southern end of the site.