Nestlé invests US$4.44m in localizing production of Nescafé Gold coffee in South Africa     

SOUTH AFRICA – Swiss food company, Nestlé, has inaugurated its new R79-million (US$4.44m) plant in Babelegi, Hammanskraal, which has localized the production of the Nescafé Gold range of coffee mixes.

The Nescafé Gold coffee mix range includes Cappuccino Original, Cappuccino Original Reduced Sugar, Cappuccino Salted Caramel Latte, Cappuccino Vanilla Latte, Cappuccino Hazelnut Latte, and Cappuccino White Chocolate.

Previously, this extensive range of products used to be imported but Nestle said that they can now be manufactured with 46% locally sourced ingredients, at a rate of 5 500 tonnes annually.

Nestlé ESAR marketing manager Nivasha Pather said the launch of the coffee mixes plant solidified Nestlé’s commitment to industrial development and investment in the region, as well as its commitment to cater to consumers’ evolving needs.

She explained that the R79-million investment in the new plant comprised high-end automated equipment, as well as training of 27 newly appointed employees, including engineers and production staff.

Nestlé recently announced its intentions to increase the sourcing of local raw materials in Africa for its products, a move that may help it reduce foreign exchange exposure that has been a headache for the sector.

“Currently more than 40% of the raw material is locally sourced but you know the ambition,” Carl Khoury, business executive officer at Nestle East and Southern Africa Region, told Reuters.

“Being close to the South African consumer means that we have a higher flexibility,” adding it can quickly react to changing consumer trends.

The company’s communications executive Mota Mota said the plant would aim to reach 90% local sourcing in “the immediate near future.”

Nestle, which runs five factories in South Africa, already produces Cremora coffee creamer and Maggi instant noodles, with the raw materials for both being heavily sourced locally.

City of Tshwane economic development MMC Hannes Coetzee commented that Nestlé has long been a solid foreign direct investor in the area, which contributes to community upliftment and opportunities for small to medium-sized service providers.

Similarly, Department of Trade, Industry, and Competition investment promotion director Brian Soldaat applauded the investment of Nestle in South Africa pointing out that localization was a key tool to improve equitable spatial development, deepen industrialization, grow the economy, and transform the lives of people.

“The importance of revitalizing South Africa’s manufacturing sector, including its contribution to the economy and export promotion, is emphasized in key national policies such as the Reconstruction and Recovery Plan,” Khoury underlined.

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