Hershey, South Korea's Lotte Will Manufacture Chocolate In China

Joint venture will open opportunities for Hershey to sell products to Asia and Lotte to bring its products to the U.S.

The Hershey Co., the chocolate and confectionery manufacturer, and Lotte Confectionery Co., Ltd., a Korean confectionery and ice cream manufacturer, announced Monday a manufacturing joint venture in China to produce Hershey and Lotte products for the Chinese market.

Terms of the joint venture were not disclosed.

The manufacturing agreement is part of an alliance that will allow the companies to seek further opportunities for marketing and distribution of products in the U.S. and Asia, including Korea, Japan, Taiwan, the Philippines and other markets.

The manufacturing facility, located in Jinshan, near Shanghai, will manufacture a variety of Hershey's, Hershey's Kisses and Reese's products.

The Jinshan manufacturing facility is expected to be operating by June 2007, with products available for Chinese consumers by August 2007.

According to J.P. Bilbrey, senior vice president of Hershey's President International Commercial Group, the alliance will allow the company to produce affordable products geared to the flavors and formats of the local Chinese market.

Under the agreement, Hershey will provide Lotte with expertise and distribution capabilities in the U.S. for Lotte's Xylitol gum and other refreshment products.