Kraft Foods Decision Irrevocable!

• Employees in Brasov begin negotiations for severance

Early this week, Vienna hosted the extraordinary meeting of the Steering Committee of the Kraft Enterprise Committee Europe. The company"s factory in Brasov, Romania, was represented by Dragos Grigore. The purpose of the meeting was to discuss Kraft"s decision to close the factory in Brasov and relocate part of the production capacity to Svoge, Bulgaria. Prior to these discussions, the employees of Kraft Foods Romania asked 11 questions related to the reasons for the company"s decision to close the factory, the risk of losing certain local brands and the limitation of development opportunities in Bulgaria, considering that Svoge is a small provincial town of few inhabitants. The employees believes that the regional management of Kraft answered these questions and many others "unsatisfactorily." The Steering Committee expressed "deep disappointment with this decision, as well as with the fact that we were not announced of this decision in due time and with a serious argumentation." Kraft Foods Romania"s decision to close the factory in Brasov is final. The Steering Committee assured the employees "of our full support to obtain severance in accordance with all Kraft policies internationally." The negotiations for severance will begin today, according to a press release from the employee"s representatives.

Layoffs start in May 2009

Kraft Foods will close the chocolate factory in Brasov by the end of 2009. This is the company"s only production facility in Romania. The 440 employees will be laid off in several stages, starting in May 2009. According to Kraft Foods Romania Corporate Affairs Manager Doina Cavache, the reason for this decision is the impossibility to develop production capacities. "The strong development of the Kraft Foods Romania business in the last few years generated additional needs for production capacity," said Lachlan Grave, CEO of Kraft Foods Romania. "Because of space limitations in the existing buildings and the location of the Kraft factory in the middle of the city, any attempt to expand the production capacity in Brasov would not be viable. We have studied production capacities in our factories and identified opportunities to consolidate production more efficiently in order to ensure the necessary dimension to sustain future development. The transfer of production capacity will not affect our commitment to continue developing business in Romania," he added. According to Doina Cavache, the chocolate tablet production will be relocated to Bulgaria. "Kraft has 180 factories worldwide and we do not want to make a green field investment in Romania as long as we have production capacity in other countries," she said. The company has so far invested 30 million USD in the factory in Brasov.