Nestlé to invest P4.3 billion in new Batangas plant

MANILA, Philippines - Food manufacturing giant Nestlé Philippines is investing P4.3 billion over a period of two years on a new factory in Tanauan, Batangas.

The factory will be built on a 27-hectare property, and will be completed in March 2012. It will produce Nestlé products Coffee-mate non-dairy creamer and Bear Brand powdered milk, two of the company’s bestsellers.

Nestlé said the Tanauan factory will directly employ a workforce of 170 people, and generate jobs in sectors providing raw materials and services.

“We believe this investment is a clear demonstration of our full confidence in the Philippines. It is timely as the country restates its commitment to accelerate economic growth. As always, our strategy is guided by our belief in creating shared value for all stakeholders,” said Nestlé chairman and chief executive John Miller.

Miller said that the entire three phase expansion will be built in a 27-hectare leased land in the Philippine First Industrial Park in Batangas. Miller refused to give details on the two other phases.

The new plant will cater to the domestic market and will only export five percent to six percent of the products to Malaysia.

For the first phase, Miller said investments will be P4.3 billion. Construction is expected to begin this month while commercial operations will start March 2012. The capacity is 64,000 tons per year.

Currently, the Coffee-mate sold in the country is from Thailand but packaged locally. The country imports 26,000 to 27,000 tons of Coffee-mate from Thailand every year.  

With the new plant in place, Miller said the Philippines will become self-sufficient in Coffee-mate.

The Philippines is the second largest consumer of Coffee-mate, next only to the United States.

On the other hand, Bear Brand is currently produced at Nestlé’s Cagayan De Oro Plant. The CDO plant produces 80,000 tons of Bear Brand per year.

Although both Bear Brand and Coffee-mate will be produced in the plant, the bulk will be Coffee-mate. Miller noted that the demand forthe two brands have been growing. In 2010, the domestic market for Bear Brand is expected to grow by 19 percent while the demand for Coffee-mate will increase by eight percent. The export of Bear Brand under the name Everyday is expected to grow by 38 percent.

Aside from the big investment for the new Tanauan Plant, Peter Noszek, Executive Vice President for Finance and Control said that Nestle Philippines spend P1.2 billion to P1.8 billion per year for the expansion of their four other plants in Pulilan, Lipa, Cabuyao and Cagayan de Oro.

Meanwhile, Miller said sales for 2009 went up by 4.3 percent to P85.9 billion. He said on the average, Nestle Philippines grows by 6.5 percent, this translates to P3.5 billion to P4.5 billion growth per year.