‘New manufacturing capabilities’ in Sri Lanka will boost our consumer offer, Nestlé

By Ben Bouckley

- Last updated on GMT

Related tags: Sri lanka, Milk

‘New manufacturing capabilities’ in Sri Lanka will boost our consumer offer, Nestlé
Nestlé says its latest investment in a UHT milk factory in Sri Lanka will have a positive “ripple effect” on suppliers and farmers in the country, and lend it the ability to extend its product offering to consumers.

The new facility – based at Nestlé’s existing manufacturing site in the Sri Lankan province of Kurunegala – will produce ready-to-drink brands such as Milo and Nespray (pictured).

Built at a cost CHF 5.8m (€4.81m) the factory forms part of a CHF 77m total investment for Nestlé (2011 group turnover: CHF 83.6bn) in Sri Lanka over the next few years.

Two other factories – one producing branded malt beverages, the other Maggi noodles – have also been opened on the same site within the last year.

Alois Hofbauer, Nestlé Lanka marketing director, said: “Our latest investment will have a ripple effect across the local community by helping our company make a positive impact on thousands of suppliers and farmers in the country.”

Hofbaeur added: “The new manufacturing capabilities also mean we can produce new products for our Sri Lankan consumers.”

Nandu Nandkishore, Nestlé’s Zone Director for Asia, Oceania, Africa and the Middle East said that the new factory was an example of Nestlé’s continued commitment to Sri Lanka’s development.

“It shows our company sees real potential in the country,”​ he said.

Nestlé Lanka’s now has three UHT milk factories operating in Sri Lanka, and the multinational is the nation’s largest single private-sector collector of fresh milk, from over 15,000 dairy farmers.

Announcing its full-year 2011 results in mid-February, Nestlé reported 11.9% organic growth in Asia in last year and regional sales of CHF 15.3bn.

“The emerging markets [within the region] produced double-digit growth…in a volatile environment, the zone remained focused on deepening distribution, aiming to service an additional one million small retail outlets between 2010 and 2012,” ​the company said.

Nonetheless, across the global Nestlé group, ‘milk products and ice cream’ returned lower operating profit margins – 13.7% -- than other product sectors: powdered and liquid beverages (22.7), confectionery (16.8%), to take but two examples.

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