Nestlé invests $1 billion

Nestlé has set aside $1 billion for its expansion programme in Africa, $27 million of which would be allocated for the expansion of Zimbabwe operations in the next few months.

The expansion of the Zimbabwe operations meant to expand existing production capacity, comes hardly two years after Nestlé fell out with President Robert Mugabe over its snubbing of milk from Gushungo Dairy Estate.

The battle between the First Family and Nestlé Zimbabwe thickened two years ago after the company turned away about 20 000 litres of milk from Gushungo Dairy Estate.

Nestlé was one of the farm’s biggest customers.

Before severing ties with Gushungo Dairy Estate, the farm was supplying between 10% and 15% of Nestlé’s milk after most of its traditional suppliers went out of business.

At the launch of the anti-sanctions petition in Harare recently, President Mugabe unleashed Indigenisation minister Saviour Kasukuwere to ensure the company complied with the economic empowerment thresholds.

Nestlé ’s head of marketing for its Equatorial Africa region, Pierre Trouilhat, said: “Zimbabwe had received $11, 7 million last year and will be receiving the remaining $15, 3 million this year.

Nestlé is also expanding on the existing production capacity of cereal plant for the production of Cérévita and Cérélac brands.”

Speaking at the launch of Nestlé Zimbabwe’s new product in Harare on Wednesday, Trouilhat said $162 million was earmarked for Equatorial Africa while Nestlé Zimbabwe would receive $27 million.

Although the government had targeted the firm for refusing to buy milk from Gushungo Dairy, Nestlé Zimbabwe had resolved to invest more money to expand existing production capacity in the country.

The company said the launch of “Maggi Rich Flavours” was aimed at reinforcing its reputation as the world’s leading “nutrition, health and wellness company”.

He added the company would continue to deliver high-quality products to consumers at affordable prices, assist raw material suppliers in the form of a supplier development programme and to develop and improve employee skills.

“Maggi is now offering more choices to consumers to delight their palates with three flavour varieties which are adapted to the local cuisine,” Trouilhat said.

Nestlé Zimbabwe country manager Kumbirai Katsande also said the company would launch three more products next year.

“We are targeting our new product to be in Mozambique by next year,” said Katsande.

He said the company’s products would be exported to neighbouring countries within the sub-region, tapping into regional trade opportunities offered by the Sadc and Comesa treaties.

Katsande said the continuous supply of consistently high-quality fresh milk was crucial to Nestlé’s operations in Zimbabwe.

During the last few years, Nestlé has witnessed the collapse of Zimbabwe’s dairy industry and prefers to work within contractual agreements to ensure a constant supply of fresh milk, but at the end of 2008, the company found itself operating in a market where eight of its 16 contractual suppliers had gone out of business.

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