Swiss chocolate maker Barry Callebaut said that it has signed a supply and development partnership deal with the Hershey Company (NYSE: HSY).

Barry Callebaut will start deliveries of liquid chocolate and finished product to Hershey within the next few months. It expects to supply about 80,000 metric tons to Hershey per year. Financial terms of the deal were not disclosed.

The agreement will transform our business in the Americas by significantly increasing our production capacities for chocolate and by optimizing our operational setup in the region, said Patrick De Maeseneire, Chief Executive Officer of Barry Callebaut

The Zurich-based company said it will build a factory in Monterrey, Mexico, and supply liquid chocolate to Hershey. This factory is expected to be operational by summer 2008 and will also supply to other customers.

The companies will also partner on research and development activities with a focus on premium chocolates, health and wellness, ingredient research and optimization, it said.

In pre-market trading on Tuesday, shares of Hershey rose 13 cents, or 0.26 percent, to reach $50.68.

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