Nestle India to invest US$98.8m in setting up new Maggi manufacturing plant

INDIA – Nestle India has unveiled plans of setting up its ninth factory in the country at Sanand, Gujarat with an initial investment of about US$98.8 million (₹700 crore) over the next two years.

The investment will enable the company increase the production capacity of the instant noodle, Maggi, as it seeks to further ramp up its market share in the sector.

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In a statement issued to stock exchanges, Suresh Narayanan, Chairman and Managing Director, Nestle India, said: “In line with our commitment to ‘Make in India’, we will soon commence the construction of our newest, and ninth, factory in India, at Sanand, Gujarat.

This state-of-the-art, environmentally sustainable factory for Maggi noodles will involve an initial investment of nearly ₹700 crore (US$98.8m) over the next two years and will generate employment for about 400 people.”

The company has been contemplating to expand its capacity through introduction of new lines as its moves to strengthen the market position and support its newly launched products.

This makes it the company’s first such investment in dedicating a new manufacturing facility for production of the instant noodle brand, after a nationwide ban in 2015 hit sales.

India’s food regulator banned the sale of Maggi noodles for almost six months over allegations that the packaged food product contained more than permissible levels of lead and MSG.

This forced Nestle to withdraw stocks of Maggi across India. The brand was then relaunched later that year and has subsequently maintained a 60% market share- as at last year.

At present, Maggi instant noodles are manufactured at three plants in India with lines dedicated to the instant noodle brand. Two more plants partially produce Maggi. The new plant in Gujarat will further help boost the brand’s sales.

According to an update by livemint, Maggi instant noodles are currently manufactured at three plants in India with lines dedicated to the instant noodle brand while two more plants partially produce Maggi.

The new facility is also expected to further boost the company’s performance whose prdofits for the second quarter ended June 2019 climbed 10.8% to US$ 61.8 million (₹438 crore) from US$ 61.8 million (₹395.03 crore) posted in the corresponding quarter last fiscal.

Revenue from operations grew 11.2 per cent to US$ 423.3millon (₹3,000.85 crore) while domestic sales growth for the company increased by 13.1% “largely driven by volume and mix and positively influenced by sales to CSD and sale of surplus fat.”

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