Nestlé to invest another USD 100 million in Indonesia

Nestlé Indonesia will invest USD 100 million in a new state-of-the-art factory to meet consumers’ increasing demand for nutritious, branded products at affordable prices.

MODEL FACTORY: Construction of the factory will be in two phases. The first phase will see the creation of a 15-hectare complex for the production of Milo chocolate malt drinks and Cerelac infant cereal.

Located in West Java, the new facility is the second USD 100 million investment Nestlé has made in Indonesia this year, following the expansion of production capacity at its milk processing factory in Kejayan, East Java.

Frits van Dijk, Nestlé Executive Vice President and Zone Director for Asia, Oceania, Africa and Middle East, underlined the Company’s long-term commitment to the region. He said: “We are very optimistic about the opportunities in Indonesia. Indonesia has a large, progressive population and the economic environment is very conducive for growth.”

Arshad Chaudhry, President Director of Nestlé Indonesia, added: “This significant investment in West Java, especially when coupled with our investment in East Java, means we will have the local capacity to strengthen our market leadership in Indonesia, while also delivering on our commitment to create shared value along our value chains. We will be able to create more employment, buy more local raw materials for our production and generate more economic activities.”

Construction of the multi-category factory is planned in two phases. The first, scheduled for completion by 2012, will see the creation of a 15-hectare complex for the production of Milo chocolate malt drinks and Cerelac infant cereal.

The second phase, earmarked for 2013 to 2015, will see an expansion to other types of product categories, such as breakfast cereals and value-added liquid milks.

The facility will apply advanced manufacturing principles to ensure its operations conform to the highest environmental standards. It will also meet halal requirements.

The latest investment boost also marks Nestlé’s drive to expand its Popularly Positioned Products (PPPs) business model in Indonesia.

Nestlé’s PPPs are fortified to specifically address some of the most common micronutrient deficiencies among lower-income consumers in emerging markets. Available in smaller or ‘daily-portion’ packs to be bought on a regular basis, PPPs are manufactured from local raw materials to minimise value chain costs.

Mr van Dijk explained: “As the world’s leading nutrition, health and wellness company, Nestlé has a responsibility to provide consumers with high-quality, nutritious products, regardless of where, and at which price point, we sell them.

“PPPs make a big difference in a country like Indonesia, where better nutrition positively impacts not only the health, development and education of lower-income consumers but also the local economy. They will continue to be one of Nestlé’s main growth drivers for the years to come.”