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Nestlé investing RM320mil this year

| 18/04/2009 | Reply

The budget for capital expenditure is 72% higher than in 2008

PETALING
JAYA: Nestle (M) Bhd has allocated RM320mil in capital expenditure
(capex) this year, a leap of 72% from last year, and almost tripled its
average annual spending, despite the global economic downturn.

Last year’s capex was RM186mil and the company had been spending an average of RM80mil to RM90mil annually.

Managing
director Sullivan O’Carrol said most of the fund would be invested in
its non-dairy creamer (RM80mil) and coffee (RM110mil) divisions.

Sullivan O’Carroll … we have invested in areas that will protect and grow our market share

The balance would be spent on its popular-positioned products (PPPs) such as Maggi, as well as for the expansion of its product lines.

“We
have invested in areas that will protect and grow our market share as
we expect the full year to be challenging,” he said after Nestle AGM
yesterday.

O’Carrol said the company would continue to stress on
its PPPs to deliver balanced products at affordable prices with a
strong focus on nutrition, health and wellness while looking at ways to
improve efficiency.

Asked if Nestle would increase product
prices or cut jobs, he said those were the last measures it would take
to improve its performance.

O’Carrol said a growth area was the export of halal products to Europe.

“We started exporting halal products to Europe about a year ago and the uptake has been encouraging,” he said.

He added that there was a growing Muslim population in countries such as the Netherlands and Germany.

O’Carrol
said Nestle’s tie-up with established hypermarkets such as Tesco,
Carrefour and Giant would help ensure its products were well
distributed and accessible to consumers globally.

“At the same
time, Nestle will maintain its commitment to producing
nutritionally-balanced products and cost containment to meet internal
cost-saving targets.

“We will also ensure that our products are competitively priced against rivals, local or foreign,” he said.

For
the first quarter ended March 31, Nestle registered a growth of 6.1% in
turnover to RM984mil compared with RM928mil in the previous
corresponding period.

Category: Asia, Europe, Food Manufacturing

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