Nestlé Makes Further Investments in ASEAN Region

In 2008, Nestlé’s business in the region experienced 15% organic growth, with sales of around CHF 5 billion. In 2009, Nestlé's investments in the region will amount to CHF 260 million.

15/06/09 Speaking at a media conference at the end of his tour of South East Asia which took him to Thailand, Vietnam, Malaysia, Indonesia and Singapore, Nestlé CEO Paul Bulcke said that the Company will continue to invest in the region and expand its business and manufacturing facilities there. Over the last three years, Nestlé has spent over CHF 550 million in capital investments in its ASEAN operations. In 2008, Nestlé’s business in the region experienced 15% organic growth, with sales of around CHF 5 billion. In 2009, Nestlé's investments in the region will amount to CHF 260 million.

In Thailand Nestlé is investing in two significant manufacturing projects, the construction of a new Nestlé Purina pet food factory located in the Amata City Industrial Estate, and the expansion of the existing Navanakorn facility, where Nestlé (Thai) Ltd produces milk and coffee products. The pet food plant, which will create 135 new jobs, will be one of the most advanced factories of its kind in the world, thanks to its state-of-the-art processing technologies. The factory will supply dry pet food to the growing local and overseas markets, including Indonesia, Malaysia, Singapore and the Philippines, as well as Korea, Taiwan and Hong Kong. Nestlé’s overall capital investments for Thailand will amount to CHF 56 million in 2009.

In Vietnam Paul Bulcke opened the new Maggi production plant at the Nestlé factory in the Dong Nai province, where Nestlé will create over 800 jobs by 2010. The plant will meet the growing consumer demand for Maggi products in Vietnam, Cambodia and the Philippines. This year Nestlé will invest a total of CHF 13 million in its operations in Vietnam. For example, the La Vie Company, a local joint venture company in which Nestlé holds a 65% interest, will invest in its two mineral water factories to double their capacity.

In Malaysia, Nestlé has committed a capital investment of CHF 85 million for 2009 to meet the increasing demand for Halal products of which Nestlé Malaysia is the Centre of Excellence for the Nestlé Group. The investment supports the set-up of new regional plants for Nescafé and non-dairy creamer as well as the expansion of its Maggi facilities following the stronger export demands for its products in the region, the Middle East and Europe. Over the last three years significant investments were made in Singapore for the upgrade and expansion of the production facilities at the Jurong factory, while another CHF 3 million of investments have been committed for 2009.

In the Philippines, which Paul Bulcke visited last year, Nestlé's investments in 2009 will amount to CHF 72 million. An additional expression of Nestlé’s commitment to the region was the establishment of a Nestlé shared service centre for financial and employee services in the Philippines in 2008, which helps to maximize Nestlé’s operational efficiency throughout the ASEAN region and Oceania.

In Indonesia, Nestlé will invest a further CHF 29 million in 2009, after a major investment of CHF 130 million in the last two years, supporting the expansion of the Kejayan milk factory in East Java in order to meet the increasing demand. After the completion of the project, the Kejayan factory will be one of the ten biggest Nestlé milk processing plants in the world.

In addition to investments in its production facilities, Nestlé has globally invested around CHF 2 billion in research and development last year. One of the research projects in the ASEAN region is the partnership between Nestlé's R&D centre in Tours, France, and the Indonesian Coffee and Cocoa Research Institute (ICCRI) on the large-scale propagation of coffee and cocoa trees. So far over a million high-yield, disease-resistant cocoa plantlets have already been distributed through local partners, a figure which, according to the Indonesian Ministry of Agriculture, should reach 70 million by 2011.

At the press conference, Paul Bulcke also illustrated how Nestlé is creating long-term value for the communities in which it operates. “As is true of all of our worldwide operations, we are committed to creating shared value in the ASEAN region, both for shareholders and local communities. This means that Nestlé, through its activities wherever it operates, has to bring meaningful value to society at large by creating both direct and indirect jobs, working with farming communities, training and developing people, as well as bringing products to the market adapted to the taste and nutritional needs of local consumers. This is part of Nestlé's DNA and the long-term approach we take to everything we do”, he said. For over a century, Nestlé has been contributing to the economic development around the world. Indeed, half of the company's 456 factories are today based in the developing world. Nutrition, water and rural development were recently defined as three focus areas in Creating Shared Value, and the number of activities in these areas is being stepped up all over the world.

Paul Bulcke emphasized that “Nestlé has been operating in this part of the world for nearly 100 years. The ASEAN region is a very important part of the Nestlé business, and our continued commitment and on-going investments demonstrate our confidence in the region.” Nestlé currently has 23 factories and around 15,000 employees in its ASEAN markets. Furthermore, it has a Research and Development Center based in Singapore, which is an integral part of Nestlé’s global network of 27 Research, Technology and Development Centers. With all of this support, Nestlé is well placed to continue nourishing the 600 million consumers living in the ASEAN countries.