Monday, October 24, 2011

Nestlé ramps up investment to meet rising demand

By Patricia Esteves (The Philippine Star) Updated October 24, 2011

MANILA, Philippines - Nestlé, the world’s leading nutrition, health and wellness company, is ramping up investment in Asia, Ocenia, Africa and Middle East (AOA) zone in its quest for future growth, its executive vice-president in charge of that region said.

In an interview with The Star, Nandu Nandkishore said he looks at the AOA zone as the engine of global economic growth because it represents 75 percent of the world’s population.

“Over the next 10 years, we see potentially one billion new consumers in this geography who will be entering a per capita income that will enable them to consume brands,” Nandkishore said.

“At the same time, in the same geography, we also see half a billion consumers who will be entering a sphere of affluence; they will be able to afford premium even luxury goods. There are huge consumer opportunities which needs to be addressed,” he added.

The AOA zone continues to be a significant market for Nestlé which produces brands like Nescafe, Milo, Nido, Bear Brand, Chuckie, Coffee-mate, Nestea, Nesvita, Maggi, Alpo, Purina and Kitkat.

Nandu cited a little bit of history, explaining that back in the 17th century, more than 50 percent of the world’s output came from the AOA zone.

“Some 300 years ago, China, India, Southeast Asia and Africa contribute more than 50 percent to the world’s output. But this has shrunk to maybe about 10 percent. But now, it’s coming back up as these people start to create more affluence. So this zone is definitely an area of the geography which we’re looking for in terms of growth,” he said.

“At the same time, Nestlé also wants to source more talent from this part of the world,” Nandkishore said.

Nandkishore replaced Frits van Dijk who retired last September after 41 years of service to Nestlé. Of Indian nationality, Nandkishore joined Nestlé in 1989 in India where, over the next seven years, assumed increasing responsibilities, mainly in marketing. In 2000, after a short stint at the International Headquarters in Vevey, Switzerland, he returned to Nestlé Indonesia where he was promoted to Market Head in March 2003.

In April 2005, Nandkishore became the market head of Nestlé Philippines. Four years after, in Oct. 2009, he returned to Vevey to take over the role of Global Business Head Infant Nutrition at Nestlé Nutrition.

Last year in September, Nandkishore was nominated as Deputy Executive Vice President in charge of Nestlé Nutrition. As the new Executive Vice President in charge of the AOA zone, Nandkishore will bring a wealth of solid business experience to the company and strong exceptional leadership skills in diverse circumstances.

“His excellent work in Nestlé Nutrition and his strong knowledge together with his great experience in Zone AOA, make him well prepared and qualified to take over this important responsibility,” Nestlé said in a statement announcing his appointment.

Phl a significant market

During the interview, Nandkishore stressed that the Philippines continues to be a significant market for Nestlé and is on target to meet the P100 billion revenue sales. Nestlé has just celebrated its 100th year in the country this year. Nestlé first made its presence in the country in 1911.

Its “billionaire brands” like Milo, Bear Brand, Nescafe and Nido have become icon of sorts in the country.

“The Philippines is a key market and we will continue to invest here,” Nandkishore said.

Last year, Nestlé Philippines racked up sales of P92 billion and in 2009 generated sales of P86 billion.

“The Philippines is one of our top 10 markets worldwide We are on track to get to a P100 billion sales from Nestlé in the Philippines this year which is quite impressive. We are continuing to invest in this economy. There is a direct investment in the form of a new factory we’re setting up in Tanauan to make coffee products and coffee creamer products,” Nandkishore said.

The Tanauan City plant, which will be operational by March 2012, is one of the major manufacturing facilities in the country which includes those in Cagayan de Oro, Cabuyao, Lipa and Pulilan.

Part of its investment program is to develop more coffee plantations and make the Philippines self-reliant on coffee again.

“There is an indirect employment that we create in the form of outreach with coffee farmers, so we have a huge program where we are going to put out two million seedlings every year to develop more coffee plantations,” he said.

“There was a time when the Philippines used to be self-reliant on coffee. Over the years, the local coffee growing industry in the Philippines actually declined. Now what we are trying to do is work once again with the farmers and the government and we have just signed an Memorandum of Agreement (MOU) with the government recently to start to drive once again the Philippines to be a major coffee producer,” Nandkishore said.

Other investments in the Philippines include the establishment of Nestlé business services, the company’s business process outsourcing (BPO) program, which was set up three and half years ago.

Today, Nandkishore said it is one of Nestlé’s most successful BPO centers worldwide.

“We employ 550 people there and we are definitely looking at this as a competent center to invest even more in the coming years,” Nandkishore said.

Nandkishore also unveiled plans to invest with Nestlé’s business partners in the value chain.

“We want to develop the farmers. We want to help develop the entire value chain in a way that creates shared value and we will continue to invest in the Filipino people. Eventually if you look at the philosophy of the way Nestlé does business, it’s all about sustainable value creations, the work sustainable is very important,” Nandkishore said.

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