Nestlé won’t dump Zimbabwe


Swiss-based Nestlé will not set its back on Zimbabwe after all, but the global foods and beverages maker would like to confute those who thought it would disinvest from the country to head off political pressure, pouring CHF25 million, roughly $23,6 million, into its local operation between now and 2013.
The investment is part of the CHF150m or $141,4 million capital projects that it has approved for Equatorial Africa over the three-year period, the company has said from Zurich.
The transnational corporation with 20 operations in Africa says the money will fund the upgrade and expansion of its manufacturing plant in Harare, including a new production line, to boost the factory’s capacity for new products and cater for Zambia, Mozambique and other regional markets.
But under the company’s three-year plan for the Equatorial African Region, Mozambique will be having its own factory and distribution centre in Beira, the country’s second largest city by 2012. This will expand the company’s distribution network in Africa by 13 in three years.
New factories would also be established in Angola — partly being supplied by Portugal and Brazil at the moment — and in the Democratic Republic of Congo (DRC), currently a host to a distribution centre.
Nestlé Zimbabwe currently produces a wide range of industrial food products such as milk cremas, baby milk formulas and a multiplicity of coffee brands, including Nescafé, Ricofy and others.
The recapitalisation project would cut the flow of imports from Nestlé South Africa, which currently supplies brands that the Zimbabwe plant has no capacity to produce.
The transnational corporation shut down its Zimbabwe subsidiary in December last year after it clashed with government officials and a black empowerment pressure group over its decision to stop milk orders from Gushungo Dairy Estate owned by President Robert Mugabe two months earlier.
Nestlé Zimbabwe dropped Gushungo farm following intense lobbying by anti-Mugabe activists in Europe, South Africa and the US who threatened to boycott its food products if it continued buying milk from the Zimbabwe leader’s farm, protesting his land policies.
Although the firm said it had no contractual obligation to buy raw milk from Mugabe’s dairy farm, the country’s Indigenisation minister, Saviour Kasukuwere, and the Affirmative Action Group insisted the measure amounted to a new sanctions regime.
Two of the Nestlé Zimbabwe’s directors who were picked up by the police for questioning later explained the company decided to negotiate a supply deal with Gushungo Dairy after 16 of the company’s traditional suppliers went “out of business”.
The factory resumed production on January 5 after government assured it there would not be any more interferences with its operations or harassment of its employees.