Nestle invests in manufacturing, distribution in Africa

Nestlé announced it will invest CHF 150 million in the Equatorial African Region (EAR) over the next three years. The company is set to build new factories in Angola, the Democratic Republic of Congo (DRC) and Mozambique, while also expanding existing factories Nestlé also will increase its distribution capacity in the region by opening 13 new distribution facilities and more than double its work force by creating 750 new jobs by 2012.

Paul Bulcke, Nestlé CEO, who announced the investment at a press conference in Kenyan capital Nairobi, said: “Nestlé is committed to unlock the business opportunities and to promote growth in Equatorial Africa. With 400 million people and an emerging middle-class with rising purchasing power, this region has major potential for Nestlé. By opening new factories in the region, we are closer to our consumers and can better adapt our products to their taste and nutritional needs. At the same time, we share our success by sourcing locally, creating new local employment and helping in the further development of the region.” 

Frits van Dijk, Nestlé executive vice president responsible for Zone Asia, Oceania, Africa and Middle East, who also attended the press conference, added: “Our strategy in the region is based on a specific business model that supports local sourcing of raw material, production and distribution of our products. Following this strategy, we recently launched products like Maggi cubes and Nestea, and also reinvigorated and relaunched our Milo brand in the EAR market.”

This new investment reaffirms Nestlé’s commitment to the EAR which includes a CHF 40 million investment in the DRC announced earlier this week. The company will build a new factory in the Congolese capital Kinshasa, which is earmarked to produce culinary and coffee well-known brands including Maggi and Nescafé 3-in-1. Other products offered under the dairy, beverages and some coffee categories will be tailored to respond to local market needs. Currently operating a distribution center in Kinshasa since September 2009, Nestlé will expand the total number of employees to 300 by 2012.

Nestlé has also committed an investment of CHF 30 million to build a new factory and distribution centre in Beira, Mozambique. The factory, which will support the increasing demand in Mozambique and neighbouring countries for Nestlé products including culinary, coffee and other beverages, will create more than 260 new jobs within three years.

In Angola, Nestlé will invest CHF 25 million in a new factory which is expected to bring the total number of employees to 145 by 2012. Currently, Nestlé sources products for the Angolan market from other markets such as Portugal and Brazil. Angola is important for Nestlé, as an emerging market with a strong economy and a growing purchasing power.

While in Kenya, Nestlé is investing CHF 30 million in the expansion of its Nairobi factory including a new production line to support its newly-launched food service division, Nestlé Professional. The factory will supply Kenya, Uganda, Tanzania, Rwanda, Burundi, Eastern Democratic Republic of Congo, Malawi and Zambia.

In addition, in Zimbabwe, Nestlé is investing in the expansion and upgrade of its Harare factory at a cost of CHF 25 million. This is expected to boost its production capacity and help supply other regional markets such as Zambia and Mozambique.

Nestlé EAR – which is a wholly owned subsidiary of Nestlé S.A. in Vevey, Switzerland – was set up in 2008. It oversees the Nestlé operations in 20 countries including Kenya, Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Madagascar, Mauritius, Mozambique, Malawi, Republic of Congo, Rwanda, Seychelles, Somalia, Tanzania, Uganda, Zambia, and Zimbabwe.

Nestlé’s Creating Shared Value commitment to the Equatorial African Region
Bulcke also stressed the wider impact of the company’s activities in relation to Creating Shared Value. This is Nestlé's way of doing business that focuses on specific areas of its core business activities, namely water, nutrition, and rural development, where value is created both for society and the company.

He emphasised: “At Nestlé, we recognise that our success depends on creating value for society – from the farmers who supply our products, to our employees, to our consumers and the communities where we operate. Our aspiration in the region is to source much of our raw materials locally to assist in developing the local economies. It has been a great honour for me to see first-hand this week how this is working on the ground.”

Initiatives include:

• In Mauritius, Kenya and Mozambique, Nestlé is preparing the launch of its Global Healthy Kids Program. This program aims to improve the nutrition, health and wellness of school children through better nutrition, greater physical activity, and other key health measures such as hygiene and sanitation.

• In Kenya, Uganda and Rwanda, Nestlé has signed a partnership with the East African Dairy Development Board to help stakeholders across the entire value chain – from farm to factory – to bring the milk to desired standards with around 179,000 farmers who are involved in this programme.

• In Uganda and Tanzania, Nestlé partnered with the Uganda Coffee Development Authority (UCDA) and the Tanzania Coffee Research Institute (TACRI) to improve the coffee sectors in these two countries. The project aims to help develop coffee trees with improved productivity characteristics; higher disease resistance and higher quality, which in turn help increase farmers’ competitiveness and income.

• In the DRC, Nestlé sponsored a women’s entrepreneurship programme called The New Hope Project. This is aimed at developing entrepreneurial skills of women in rural DRC and providing them with the opportunity to establish small businesses selling Nestlé’s products.