Nestlé to invest US$245m in Brazil over the next three years to expand production

BRAZIL – Nestlé SA will be investing US$245.75 million (1 billion reais) in Brazil’s Sao Paulo state over the next three years to expand its production capabilities.

Nestlé plans to set up new production lines and integrate new technologies in existing factories, as well as push forward a digital transformation, reports the Reuters.

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The latest investment adds to over US$490 million (2 billion reais) that the Nestlé has invested in Brazil over the last five years.

The Chief Executive for Nestle Brasil Marcelo Melchior described the state as an important landmark in the company’s success.

“Sao Paulo state is greatly important to our story, as it hosted our very first factory (in Brazil),” Marcelo said in a statement. Nestle employs more than 100,000 people indirectly in Sao Paulo only.

Nestlé, which according to the 2018 Forbes Global 2000 is the world’s largest food company, has been making major investments across various markets  in a race to expand its production capacity and maintain leadership in the global food industry.

In July, Nestlé has announced a US$100 million investment to expand three factories in Indonesia, a move that will see the company increase its current production capacity in the country by 25%.

The investment will be used for the expansion of production sites; Karawang in West Java, Kejayan in East Java and Panjang in Lampung and will also encompass both current and upcoming Nestlé products lines in Indonesia.

In addition, the company plans to invest about US$98.8 million (₹700 crore) in setting up its ninth factory at Sanand, Gujarat India over the next two years.

Nestle and Starbucks have launched a line of refrigerated creamers under Starbucks brand in the USA as part of the global business alliance

As the company seeks to tap into the growing refrigerated creamer market, projected to top US$7.8 billion by 2023 in the US, Nestlé partnered with Starbucks to launch a line of refrigerated creamers under Starbucks brand in the USA.

The new Starbucks Creamers are the fourth product platform launched in a year following an agreement with Nestle to commercialize new products in various markets.

With the partnership, Nestlé is looking to market Starbucks coffee and tea products around the world, something it hopes would realise double-digit growth in the US business.

Nestle reported 3.5% growth in sales to US$ 46.11 billion (CHF 45.5 billion) during the its half year results ending 30th June 2019 and expect organic sales growth of around 3.5% in the full-year underlying trading operating profit margin at or above 17.5%.

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