Kraft taps main chocolate supplier
Barry Callebaut AG, the world's largest maker of bulk chocolate, rose to the highest in more than two years in Zurich trading after saying it will become the main supplier of cocoa and chocolate to Kraft Foods Inc.
The shares gained 6 percent to 746 Swiss francs today when the market closed at 5:30 p.m. in Zurich. That's the highest price since Aug. 19, 2008. The stock has rallied 16 percent this year, valuing the company at 3.86 billion Swiss francs.
Under the agreement, Barry Callebaut will supply the majority of Kraft's global requirements for the products and will probably double deliveries to the Northfield-based company. Barry Callebaut will invest about $65 million to increase production capacity in the U.S. and other countries, the Zurich-based chocolate maker said today in a statement.
"This is genuine positive news," Andreas von Arx, an analyst at Helvea AG, said in a note. The $65 million investment could boost the company's capacity by about 100,000 tonnes and increase volume by 10 percent, he wrote.
The agreement "ranks amongst the largest strategic deals our company has ever signed," Barry Callebaut Chief Executive Officer Juergen Steinemann said in the statement.