Unilever spends $152m on expanding its Gardner, KS spreads site, creates 100 new jobs

By Elaine WATSON

- Last updated on GMT

Unilever spends $152m on expanding its Gardner, KS spreads site

Related tags: Better

Unilever has announced plans to pump $152.5m into its New Century margarine and spreads manufacturing plant in Gardner, Kansas, increasing its size by 50% to 447,929 square feet and creating 100 new jobs.

The expansion will bring the total workforce to 270 employees at the plant, which makes Country Crock, Promise, Imperial, I Can't Believe It's Not Butter, and Brummel & Brown brands.

Around $45m will be spent on construction and infrastructure, with the rest going to new manufacturing equipment, said the firm, which expects the new part of the facility to be operational in around 18 months.

Paul Polman: 'We've seen signs of improvements in spreads and are optimistic that we're back on the right track

Unilever's spreads business - which represents about 7% of group sales - has been struggling lately, with some commentators recently suggesting that Unilever should put its spreads business ‘on notice’ if things don't improve (click here​).

However, speaking to analysts on the Q2, 2013 earnings call late last month, Unilever CEO Paul Polman said the firm had "seen signs of improvements in spreads and are optimistic that we're back on the right track​", although sales were still in decline.

"Second quarter sales development was better than the first, although still negative. We expect to see a continuation of this improving trend in the remainder of the year, as we continued to work on the price, taste and naturalness of our products. In fact, the Gold variants that have already been introduced in more markets are doing well."

I am as frustrated as you are in the progress we've made here

Paul Polman
Paul Polman: 'I hope I can report better numbers on spreads, otherwise I'll lose my own credibility'

But progress had been slow, he admitted: "In spreads, we know what to do, but it's also fair to say that I am as frustrated as you are in the progress we've made here. And part of this challenge is frankly have been self-inflicted.

"It is about staying price-competitive, it is about getting the right taste and it is about the perceived naturalness of our products. That is the way to unlock the growth in this category.

"That is also the way that the growth is merited in this category, as the healthy alternative to butter. It will take time, but we have the technology, marketing skills, scale and now, also the organization to deliver."

Promises_ButterySpread-Unilever

We know that margarines are particularly healthy but consumers are not perceiving them to be natural versus butter

He added: "We've changed the team. We have a good strategy. So I hope I can report better numbers on spreads, otherwise, I'll lose my own credibility."

Speaking to analysts in April, Investor Relations boss James Allison said: “We know that margarines are particularly healthy but consumers are not perceiving them to be natural versus butter​."

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