To Asia with Love

FM Global helps bring Hershey’s Malaysian facility on line


It is the ultimate treat. It is an indulgence for when things go well, a consolation when things go bad and it is sometimes, literally, the icing on the cake.

In the U.S. alone, 2.8 billion pounds (1.2 billion kilograms) of chocolate are consumed each year, an average of 11 pounds (5 kilograms) per person. Our love affair with chocolate has made us experts on the subject. And just about every kid learns a Hershey’s bar on a hot summer day is best eaten right away—because chocolate melts.

That basic characteristic of chocolate is essentially the reason Hershey has built a multimillion-dollar, state-of-the-art facility in Malaysia.

“To ship a product that melts from the United States becomes very expensive because you need to maintain refrigerated conditions,” explains Steve Myers, Hershey’s director of construction and utility systems. “So, it is much more cost effective to produce the product in the same region that we’re going to actually sell it.”

When Hershey looked to expand its global reach to Asia and the Middle East, the makers of Hershey’s Kisses, Reese’s Peanut Butter Cups and more than 80 brands of candy needed to find a new home.

Close to suppliers, markets

Hershey settled on Johor in southern Malaysia. Its access to international shipping lanes and proximity to major markets made it an ideal location. Designed to be modern and environmentally friendly, the Johor plant is the second largest in Hershey’s global manufacturing network. The massive facility covers more than 40 acres (17 hectares) and its flexible technology enables production of the broadest array of products of any Hershey factory outside of the U.S. and Mexico.

“Fifty to 60 percent of our major commodities are also processed in the state of Johor,” says Subas Visvalingam, site director of Hershey Malaysia and supply chain director for Asia, Europe, Middle East and Africa. “So, we’re close to our suppliers of sugar, palm oil and cocoa. We’re also close to our customers. We ship to 30 markets from this location and we’re able to pro-duce a broad array of products, including Hershey’s Milk Chocolate and Hershey’s Kisses, which are hot selling brands in this part of the world.”

While Johor proved to be an ideal location, building a massive chocolate factory in Malaysia was not without its challenges. And FM Global was an integral part of ensuring the facility was built to the highest standards.

“We were involved every step of the way, from site selection to review services to project management,” says FM Global Account Manager Fred Taber.

The importance of FM “Global”

The “Global” in FM Global proved to be of vital importance to Hershey. Hershey had never built in this region before and was unfamiliar with the climate, culture and customs. FM Global, with its WorldReach® Partner network and its regional representatives in neighboring Singapore, immediately helped bridge the gap.

FM Global assisted with site selection to ensure that Hershey wasn’t facing flood or earthquake exposures and then worked with the Malaysian design team to make sure the design met all FM Global engineering standards.

“FM Global was one of the key elements,” Myers says. “We had to bring FM Global in on several occasions for consultation to ensure that we got a building that was built in accordance with FM Global standards.”

The design of the building, the production and storage requirements and the climate all posed challenges that FM Global helped to overcome.

The facility included a sugar conveyance system, which created a dust explosion exposure. So, the new facility had to be designed to meet FM Global’s standards for dust collection and disposal. The finished goods warehouse included dense storage areas, which required very specific sprinkler protection. The seven-rack-high system relies on an FM Global recommended array using early suppression, fast response, high-capacity ceiling sprinklers.

The site selected was in a new area of development so Hershey had to invest in the electrical and water infrastructure for the site. FM Global worked with Hershey to ensure the water supply was adequate to support the fire suppression system throughout the 885,000 square foot (82,200 square meter) facility.

“We adhere to the local building ordinances and we always maintain the FM Global standards,” says Staci Smith, global risk manager at Hershey. “We will rely heavily on this facility so being down for an extended period of time would be detrimental to the company. That’s why Hershey partners so closely with FM Global. It is very important to us that we maintain that high standard, whether the facility is in the U.S. or if it’s located internationally.”

Rain, roadways and roaster

Johor also gets a significant amount of rainfall. The rain created poor soil conditions, which required driving thousands of pilings into the ground to carry the building’s static and dynamic loads. The roof had to be designed to move water off quickly and funnel it away from the building.

The facility design also included a separate building to produce nut-containing products, physically separating the allergens from the rest of the facility. Separating the buildings also allowed for the installation of a road that gives easy access to fire and emergency vehicles. And the facility uses new roasting technology, which helps reduce its exposure to fire.

“We roast almonds in Johor and the method we selected to roast the almonds is not what we use in the U.S.,” Myers says. “In the U.S., we use gas-fired roasters. Here, we use a new resistance-heating technology. It is a much safer way to roast.”

The construction came with its own hurdles. At its peak, more than 750 workers from eight countries were working on the project. A small village was constructed next to the site to house many of the workers. Myers was on site for most of the construction phase of the project, engaging with the local contractors and pushing the project toward completion.

“Normally, we send a project engineer to a site on a monthly or even on a quarterly basis,” Taber explains. “Because of the complexity, significant construction issues arose at several points in time. Our project engineer was going out every two weeks and reaching out to Steve every two or three days to make sure everything was being done correctly and Hershey was getting what they paid for.”

30-year partnership

FM Global and Hershey have been partners for more than 30 years. Hershey has come to rely on FM Global’s research and engineering standards to ensure its facilities worldwide are built to the same high standards. Hershey also incorporates FM Global’s training modules into its own learning management system, adopting FM Global training for hot work and other human element components like fire suppression testing and maintenance.

“It’s crucial to keep our facilities open because if we can’t get the product on the shelves, then our consumers are going to select other products from our competitors,” Smith says. “So it is very crucial for us, from a brand reputation perspective, to make sure that we can meet the demands of our consumers. Hershey really believes that most property losses are preventable. So we do utilize our partnership with FM Global in order to do what we can to prevent losses from occurring.”

The Johor facility is just the latest example of the success of the partnership between FM Global and Hershey. And it just may be the icing on the cake.

“We had some executives go over to the plant who have been to our plants in the U.S. and they feel it’s one of the nicest in our network,” Myers adds. “Just how we finished it, how we cared for the floor, how we took the bulk of the utilities and kept them above ceiling space—it’s all different from what we’ve ever done before. It sets a new baseline for us when it comes to building new manufacturing facilities.”