ASEAN region: New investments reaffirm Nestle’s commitment

Vevey / CH. (ng) 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, Nestle 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, Nestle S.A. has spent over 550 million CHF in capital investments in its ASEAN operations. In 2008, Nestle´s business in the region experienced 15 percent organic growth, with sales of around five billion CHF. In 2009, Nestle´s investments in the region will amount to 260 million CHF.

• In Thailand Nestle is investing in two significant manufacturing projects, the construction of a new Nestle Purina pet food factory located in the Amata City Industrial Estate, and the expansion of the existing Navanakorn facility, where Nestle (Thai) Limited 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. Nestle´s overall capital investments for Thailand will amount to 56 million CHF in 2009.
• In Vietnam Paul Bulcke opened the new Maggi production plant at the Nestle factory in the Dong Nai province, where Nestle 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 Nestle will invest a total of 13 million CHF in its operations in Vietnam. For example, the La Vie Company, a local joint venture company in which Nestle holds a 65 percent interest, will invest in its two mineral water factories to double their capacity.
• In Malaysia, Nestle has committed a capital investment of 85 million CHF for 2009 to meet the increasing demand for Halal products of which Nestle Malaysia is the Centre of Excellence for the Nestle Group. The investment supports the set-up of new regional plants for Nescafe 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 three million CHF of investments have been committed for 2009.
• In the Philippines, which Paul Bulcke visited last year, Nestle´s investments in 2009 will amount to 72 million CHF. An additional expression of Nestle´s commitment to the region was the establishment of a Nestle shared service centre for financial and employee services in the Philippines in 2008, which helps to maximize Nestle´s operational efficiency throughout the ASEAN region and Oceania.
• In Indonesia, Nestle will invest a further 29 million CHF in 2009, after a major investment of 130 million CHF 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 Nestle milk processing plants in the world.

In addition to investments in its production facilities, Nestle has globally invested around two billion CHF in research and development last year. One of the research projects in the ASEAN region is the partnership between Nestle´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 CHF by 2011.

At the press conference, Paul Bulcke also illustrated how Nestle 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 Nestle, 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 Nestle´s DNA and the long-term approach we take to everything we do», he said. For over a century, Nestle 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 «Nestle has been operating in this part of the world for nearly 100 years. The ASEAN region is a very important part of the Nestle business, and our continued commitment and on-going investments demonstrate our confidence in the region». Nestle 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 Nestle´s global network of 27 Research, Technology and Development Centers. With all of this support, Nestle is well placed to continue nourishing the 600 million CHF consumers living in the ASEAN countries.