Nestle Phils spends P5.4B on expansion projects this yr

Tagum, Davao , Philippines — Nestle Philippines, Inc. (NPI) spent P5.4 billion for its operations in the country this year, the bulk of which was spent for its P4.8 billion Tanauan, Batangas Coffee-mate manufacturing plant, according to NPI executive vice president and finance and control director Daniel Aellen.

In an interview at its experimental development facility here, Aellen said NPI is spending P4.8 billion for the construction of its new Coffee-mate manufacturing plant in Tanauan, Batangas, while around P600 million was spent on other machinery and capacity   upgrade of its other existing plants in Cabuyao, Laguna; Pulilan, Bulacan and Cagayan de Oro plant.

The Coffee-mate manufacturing plant in Tanauan, which will have a production capacity of 80,000 tons, will be ready for commissioning by the middle of next year.

Last year, Aellen said, NPI’s capital expenditure amounted to around P4 billion which was spent for upgrades of its various plants.

For 2012, NPI is still drawing up its budget, Aellen said, adding that the company is generally upbeat about continued growth for the company.

NPI’s local production includes Nescafe, Bear Brand, formula milk brands such as Nan, Nido powdered milk, as well as Nestle ice cream and yogurt, and powdered milk beverages such as Chuckie.

According to Edith de Leon, head of corporate affairs of NPI, the Coffee-mate plant is just phase 1 of NPI’s expansion plans in the 27-hectare Batangas property.

However, de Leon refused to reveal at this time, NPI’s investment plans for the phase two development of its Batangas plant.

All the production of the Tanauan, Batangas plant, she said, is for the domestic market.

The Philipines, De Leon said, is only second to the US in the consumption of the Coffee-mate coffee creamer.

Initially, the Tanauan manufacturing plant, De Leon said, would only produce the original Coffee-mate creamer. She said there are plans in the pipeline to produce flavored creamer varieties.

Meanwhile, NPI continues to help the local coffee industry grow and improve the quality of its coffee beans, specifically the Robusta variety in Mindanao.

Through its experimental and demonstration farm in Tagum, Davao del Norte, NPI is producing quality coffee seedling which coffee farmers can buy to start their own coffee nursery or farm.

According to De Leon, NPI is currently purchasing only 25 percent of its current coffee bean requirement from Filipino farmers because there is simply not enough local production.

As such, NPI still has to import up to 75 percent of its raw coffee bean requirement.

Annual local demand for coffee beans, De Leon said, is estimated by NPI at 64,000 metric tons.

NPI is hoping that with aggressive efforts to revive the Philippine coffee industry, it will be able to reverse its source of raw coffee bean, buying up to 75 percent of its requirement from Filipino coffee growers by 2020.

According to the Department of Agriculture, the local coffee industry registered a negative two percent growth in 2010 and a negative seven percent in the first three quarters of this year.

Optimistically, though, the DA is hoping to post a positive turnaround and growth of five percent next year with an assistance of P163 million for various coffee-related projects.