ZURICH Swiss group Barry Callebaut (BARN.S) is to supply Unilever (ULVR.L), the world's third-largest consumer goods group, with 70 percent of its global cocoa and chocolate needs.
Barry Callebaut, which already makes chocolate for groups such as Hershey (HSY.N) and Nestle NESN.VX, will invest 22 million Swiss francs (15 million pounds) in its global factory network to boost capacity.
The additional volumes have a ramp-up period of 12 months, starting immediately, said Barry Callebaut, the world's largest chocolate maker.
Barry Callebaut shares were up 1.8 percent at 0910 GMT, compared with a 0.2 percent lower European food and beverage index .SX3P. Unilever shares were down 0.4 percent in London.
"The announcement of a new outsourcing contract with Unilever is again a confirmation that the outsourcing trend is going on and not only with large chocolate producers, but can be with all kind of confectionery producers," Vontobel analyst Claudia Lenz said.
Barry Callebaut expects volumes to grow 6-8 percent on average through 2012/13 and is banking on outsourcing deals, such as with Unilever, to help it reach this goal.
The two groups have already worked together, with Barry Callebaut helping develop Unilever's ice-cream brand Magnum. The latest deal will see Barry Callebaut double its volumes with Unilever.
Barry Callebaut provides the food manufacturing industry with cocoa and chocolate products, coatings and cocoa powders.
($1 = 0.9344 Swiss franc)
(Reporting by Katie Reid; Editing by Hans-Juergen Peters)