Swiss chocolate manufacturer Barry Callebaut has entered into an agreement to supply up to 16,000t of chocolate and compound products annually to Japanese confectionery firm Morinaga, over the next ten years.
The companies will also strengthen their cooperation in the field of research and development (R&D) and develop new products.
Morinaga president Masayuki Yada said that by outsourcing the chocolate production to Barry Callebaut, the company can concentrate its resources on R&D and marketing of consumer-chocolate.
Under the agreement, Barry Callebaut plans to invest CHF18.5m (19.4m) over the next one year; will close its plant in Amagasaki, near Osaka, by mid-2013; and build a new chocolate and compound factory in Takasaki, where Morinaga plans to strengthen its presence.
The new plant in Takasaki will allow Barry Callebaut to shift the complete operations of Amagasaki plant and boost the production capacity.
From the new location, Barry plans to gradually increase its volume of sales to the third party industrial and gourmet customers in Japan.
In addition, it plans to strengthen its sales organisation in Japan, which will enable the Swiss company to enter into new markets.
Barry Callebaut CEO Juergen Steinemann said from the new location the company can even better cater to both Morinaga's chocolate needs and boost the sales volume for third-party customers.
"This will further strengthen our position in one of Asia's most important chocolate market," Steinemann added.
The new agreement marks the extension of ten-year strategic partnership, signed by the two companies in 2008, where in Barry agreed to supply 9,000t of products a year to Morinaga, following which, it opened a chocolate production facility in Amagasaki.
In the Asia-Pacific region, Barry Callebaut currently owns and operates three chocolate facilities in Singapore, China and Japan, as well as a combined cocoa and chocolate plant in Malaysia, where the company's regional head office is located.