Nestle in new Africa Strategy

Nestle in new Africa Strategy

by / 4 Comments / 142 View / 2nd August 2010

The Swiss food giant Nestlé has unveiled a new continental strategy for Africa announcing that it will invest $138.32 million in East, Central and Southern Africa over the next three years to enhance its competitiveness in the food industry.

The firm hopes the move will increase their overall sales in emerging markets over the next decade.

“With 400 million people and an emerging middle-class and ever-rising purchasing power, this region has major potential for Nestlé products,” said Nestlé CEO Paul Bulcke.

The investment will see up to $27.66 million go toward doubling production capacity in its Nairobi factory, which will supply the East African region, Malawi, Zambia, and the Democratic Republic of Congo.

A similar amount will be spent on building a new factory in Mozambique to meet rising demand for beverage products (especially coffee) in the country and its neighbours.

The decision to inject more funds in Kenya comes against the backdrop of other multinational manufacturers pulling their production activities out of the country.

Nestle directly employs 750 people in the region and plans to double the figure by 2012.

The largest share, $36.88 million, will be used to set up a factory to process dairy, coffee, and other beverages in the Democratic Republic of Congo.

Harare’s factory has been allocated $23.36 million for expansion and it will in turn supply the Zambia and Mozambique markets.

The company is also set to build new factories in Angola and Mozambique and open 13 new distribution facilities in the region.

It is focusing on local partnerships to penetrate the local market and distribution networks.

In Kenya, Uganda and Rwanda, Nestlé has signed a partnership with the East African Dairy Development Board.

This decision by Nestlé, and many large companies like it, shows that the business is making use of the wealth of untapped potential of Africa. This will benefit not only Nestlé itself but also Africa, which is becoming a serious competitor in on the world stage.