Kraft's Growing Emerging Market Business Could Prompt Rethink Of Valuation

US-based food giant Kraft has announced that it is investing US$50mn in a new plant in northeastern Brazil. The facility, based in the state of Pernambuco, will begin producing chocolate and Tang powdered drinks in 2011 and could also be used to produce Trident chewing gum, purchased as part of the Cadbury acquisition in 2009. This investment is an example of Kraft's growth in emerging markets, which should accelerate following the acquisition of Cadbury, and which we believe is not yet fully reflected in the firm's valuation.

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