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Nestlé to build $350m infant formula plant in Mexico

By Mark Astley+

29-Jan-2014

Nestlé to build $350m infant formula plant in Mexico

Nestlé will plough $350m (€256m) into the construction of a new infant formula manufacturing plant in Mexico, as part of a wider $1bn (€732m) investment in the country.

Switzerland-based Nestlé, the world’s largest dairy manufacturer, announced plans last week to invest $1bn in Mexico over the next five years - a decision the company described as a “striking example” of its commitment to the country.

The $350m plant, which will be built in Ocotlán, West Mexico, will produce Nestlé infant formula brands including Nan and Good Care.

A Nestlé spokesperson declined, however, to “disclose the plant’s capacity for competitive reasons.”

“The investment is an example of Nestlé’s commitment to Mexico, and our long-term vision in a market with high growth potential,” the spokesperson told DairyReporter.com.

Made for export

Along with the new plant in Ocotlán, Nestlé plans to build a pet food factory in Silao and expand its existing cereal operations in Lagos de Moreno. The new facilities will manufacture products for both domestic consumption and export.

“Some 40% of the products made at the new infant nutrition factory in Ocotlán will be exported to Latin America and the Caribbean,” said the spokesperson.

Nestlé controls a sizeable portion of the Mexican infant nutrition product market.

In April 2013, the Mexican Federal Competition Commission (CFC) approved Nestlé’s $11.85bn (€9bn) acquisition of Pfizer Nutrition on the condition that it sold off Pfizer Nutrition’s Mexican business to an independent third party.

The CFC initially blocked the takeover over concerns it would give Nestlé too high a share of the domestic infant nutrition market.

Commitment to Mexico

The builds, which are the first by Nestlé in 20 years, will create around 700 direct and 3,500 indirect jobs, the company claimed.

Nestlé’s decision to invest in Mexico has been welcomed by Mexican president, Enrique Pena Mieto, who branded the new “encouraging.”

“I want to express my recognition to the company which has deep roots in Mexico and continues to trust in our company,” said Mieto.

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