FootPrints
Active Member
Posts: 254
Posted: Mon Feb 06, 2006 5:19 pm
<i>(I came across this article the other day and wondered if this is the reason why so many products are using artificial sweetners. And is the higher cost of natural sugar kept high so that they do use them?) </i><br />
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<b>Other Nations Offer Sweeter Labor Costs</b><br />
By Tom Dochat, The Patriot-News, Harrisburg, Pa. <br />
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Feb. 5--Candy companies such as The Hershey Co. that need new factories would encounter much lower costs in Canada or Mexico as opposed to the U.S., a business-location consultant has found. <br />
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That's not too surprising. Mexico and Canada offer lower labor costs, and plants in those countries can benefit from lower sugar prices, the result of U.S. government regulations, according to the study conducted by bizcosts.com, a trademark unit of The Boyd Company Inc. of Princeton, N.J. <br />
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Confectionery companies are shifting production to these lower-cost countries, and the U.S. is failing to attract new investment as it loses out to its neighbors, said John H. Boyd, president of the company. Mexico offers significant savings in labor costs, but plants in Canada benefit from government support of health care costs, as well as existing employee skill sets, infrastructure, common language and free market sugar prices, he said. <br />
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Boyd's study analyzed a variety of locations throughout the U.S., Canada and the maquiladora border area of Mexico. Included in the study were Hershey and other parts of Pennsylvania, such as York, Lancaster and Allentown. Pennsylvania is the leading confectionery-producing state in the country, led by The Hershey Co. and its three major manufacturing facilities in its hometown. <br />
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The study, an update of one Boyd conducted in 2003, evaluated a variety of costs for a hypothetical 175,000-square-foot plant with 300 hourly employees. The study considers labor costs in wages and benefits, electricity, moving products to specific markets, heating and air conditioning expenses, industrial lease rates, and expenses for sugar ingredients, natural gas and corporate travel. <br />
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The study found that a plant in San Francisco would have the highest annual operating costs, at $27.7 million, while a maquiladora plant in Mexico would have the lowest cost, at $12.7 million. <br />
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The Hershey/Lebanon area was in the higher range at $25.1 million, while a variety of Canadian locations -- Toronto, Montreal, Winnipeg and Halifax -- fell in the lower range, from $21.1 million down to $17.6 million. <br />
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"The value of our report is that it looks at all the costs," Boyd said. He said his company is not a client of Hershey or the National Confectioners Association. "We have no vested interest in this."<br />
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"We counsel companies where to locate," he said. "Our constituency is the corporate world in and out of the food-processing industry."<br />
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People and organizations associated with the confectionery industry were not surprised by Boyd's findings about the lower costs in Canada and Mexico. Tom Earley of Promar International, an economic consulting firm for the National Confectioners Association, said U.S. job growth has been declining in the food sector that uses sugar, while jobs are increasing in the non-sugar food manufacturing trades. "That tells you something," he said. <br />
<a href="http://www.redorbit.com/news/science/380478/other_nations_offer_sweeter_labor_costs/index.html?source=r_science">continued</a><br />
These days, if you are not confused, you are not thinking clearly. Mrs. Irene Peters
