By: Bernie Cahiles-Magkilat
MANILA, Philippines — Nestlé Philippines Inc. (NPI) does not discount any price hike of its products for the remaining of the year but said it is protecting coffee and Milo, two products that Filipinos love most.
John Miller, NPI president told reporters at the sidelines of the recent media event over the weekend for the visit of Nestlé S.A. chief operating officer Paul Bulcke to the local unit, which is celebrating its 100th year of operation in the country.
According to Miller, although he does not see any further price adjustments of their products soon, he cannot be sure if they would seek price hike in the future.
Earlier, NPI has raised prices of its milk products to account for the increase in prices of milk solids in the international market.
“But we are protecting our Nescafe and Milo products,” Miller said. Nescafe and Milo products are two preferred Nestlé products by Filipinos.
During the visit, Bulcke has acknowledged the upward trend in prices of food products. But the company has been trying to cope with high prices of raw materials through various efficiency measures in their operations. He cited its efficient procurement processes, product innovation on packaging and sourcing. He said that price increase is only resorted to once all other measures have been exhausted.
Bulcke also announced that the Philippines is included among the beneficiaries of its 500 million Swiss francs for its coffee program, which seeks to augment coffee production via some form of assistance granted to farmers.
He did not elaborate on how it would be allocated for the Philippines under that coffee budget, but said the coffee farming initiative of Nescafe is expected to revive coffee production in the country by linking up with coffee farmers in terms of support, technology, planting requirements and seedlings. Doing so, he said, would make Nestlé less dependent on imported green coffee beans for Nescafe’s production.
At present, Nestlé buys 85 percent of local coffee beans and imports the rest from Vietnam and Indonesia because of insufficient local production.
“The Philippines should be part of this coffee production initiative because the conditions necessary are there like the right climate and environment to accelerate coffee production,” Bulcke said.
At present, Nestlé has an experimental coffee production in Davao.
Improving coffee production in countries where they operate is Nestlé’s strategy to increase local sourcing of raw materials. The strategy is expected to make its operation more cost efficient, help the plight of coffee farmers and promote sustainability. Over 90 percent of the products the company sold locally are produced locally.
Nestlé Philippines has four factories manufacturing coffee, milk, chocolate energy drinks, cereals, infant nutrition products, ice cream and chilled dairy products. A fifth Nestlé factory is under construction in Tanauan, Batangas and will start operations in 2012.
Nestlé has invested over P10 billion in the country in the past five years, with P4.8 billion allocated for the Tanauan facility. The bulk of these investments have gone towards enhancing production capability to meet growing local demand.