Snack-maker Calbee Inc. will build a new production unit at its factory in Kyoto Prefecture to meet growing demand for cereal, mainly in China, the company has said.
Calbee will invest around ¥7 billion to construct the new facility with two production lines at its plant in the city of Ayabe. It aims for the facility to start operating in mid-2018.
Cereal ranks third as a breakfast item after rice and bread amid a growing number of health conscious consumers, and annual sales of Frugra — Calbee's cereal brand — rose to around ¥30 billion in fiscal 2016 from ¥3 billion in fiscal 2010.
China accounts for around 20 percent of the company's overall Frugra sales. Calbee does not import the cereal directly but relies on local marketers.
"We cannot ignore the fact that (cereal) sells in China. Frugra will be a major pillar of our business," Akira Matsumoto, chief executive officer and chairman of the company, said at a news conference.