Kraft to create distribution center in Springfield Underground

The storage space will be a regional distribution center for Kraft and will allow the company to consolidate the five off-site storage locations it currently has in Springfield.

Westerville, Ohio-based Exel will operate the new warehouse, which is slated to begin operation in spring 2008.

Kraft spokeswoman Cathy Pernu said the lease with Springfield Underground is for 10 years but would not disclose additional lease terms. She also declined to comment on the contract with Exel, but noted Kraft has used third-party companies, including Exel, in Springfield before.

The underground storage space is expected to use two-thirds less energy than an above-ground facility of the same size. Consolidating distribution points in one location also will reduce the number of stops by Kraft and customer trucks, thereby cutting fuel consumption.

Springfield is well-positioned for a regional distribution point because of the local plant, at 2035 E. Bennett St., the presence of a Kraft Private Fleet and other major transportation carriers in the area, and the city’s proximity to customer distribution points, according to a company news release.

Meanwhile, the warehouse space that will be freed up at the local plant will be converted for other uses. Kraft is investing in new manufacturing equipment and better technology at the plant, which will increase its processed cheese manufacturing.

As a result, the plant’s 935-worker employment could increase by about 20 jobs, according to the release.

The plant makes Philadelphia cream cheese, Kraft cheese, Velveeta pasteurized processed cheese, Lunchables lunch combinations, Kraft macaroni and cheese dinners and Easy Cheese spread.

Kraft Foods is traded on the New York Stock Exchange under KFT. Shares closed Wednesday at $35.25, compared to a 52-week range of $29.50 to $36.67.