QCOSTARICA – After 107 years, the Gallito plant in Costa Rica will close, moving from Heredia to Puebla, Mexico, laying off 300 people, the company said in a press release.
The official closure of the facility, which produces powdered drinks, desserts, candies and chocolates, will be on July 30,2016.
Mondelez will maintain its administrative and services centre located in Santa Ana, which employs 320.
Sylvia Alvarado, Manager of Corporate Affairs for Mondelēz International, explained that the reason for the move is that the Mexico plant has increased capacity.
“It is a strategic decision to maximize scale plants that already have increased installed capacity and most advanced technology. This is the case of the Puebla plant in Mexico, where we will move production,” said Alvarado.
“Under the principles of transparency and respect for our employees in manufacturing, whom we deeply appreciate, are communicating this decision three months in advance to ensure smooth transition,” said Juan Ignacio Munoz, director of operations for Mondelēz International Latin America.
In addition, all products including the Gallito brand, will still be available in retail outlets in the country.
In Costa Rica, Mondelez operates under the name of Kraft Foods and other companies such as El Gallito Industrial (since 1998), and manages brands like Trident, Tang, Oreo, Chips Ahoy, Ritz, Halls, Cadbury, Clight, Social Club, Royal and Gallito.
The Minister of Foreign Trade, Alexander Mora, said that due to its small size, our country can hardly compete.
“Certainly the issue of scale production in Costa Rica is an undeniable…it has to do with the natural scale of small dimensions of our country,” Mora said.
However, Francisco Gamboa, executive director of the Chamber of Industry (Cámara de Industrias), cites the country’s lag in competitiveness as the reason for Mondelez and others leaving the country.
Jorge Sequeira, director general of the Costa Rican Coalition for Development Initiatives (CINDE), explained that Costa Rica has positioned itself as a leader in the provision of services and also the manufacturing industry of medical devices and Mondelez is responding to the global business dynamics.
Last year, Mabe, Incesar Standard and Rawlings were some of the companies to close its manufacturing plants in Costa Rica. In 2014, Intel also moved its manufacturing away from Costa Rica.
For the Gallito plant workers, Alvarado explained that it will be difficult to move workers who lose their jobs in manufacturing to the services area, where generally a high level of English is required. The company spokesperson added that the company will support them to find a new job.