MODEL FACTORY: Construction of the new, state-of-the-art factory in Karawang, West Java is taking place in two phases.
Nestlé this week announced it will make an investment of USD 100 million in Indonesia for the third time in 18 months.
The move is set to expand the Company’s operations at a new state-of-the-art factory currently under construction in Karawang, West Java.
Nestlé had already announced in December 2010 that it would spend USD 100 million on the new factory, which will meet Indonesian consumers’ increasing demand for nutritious, branded products at affordable prices.
This followed another investment of USD 100 million made by the Company earlier in 2010 to increase production at its milk processing factory in Kejayan, East Java.
Frits van Dijk, Nestlé Executive Vice President and Zone Director for Asia, Oceania, Africa and Middle East, underlined the Company’s long-term commitment to the region.
He said: “We are very optimistic about the opportunities in Indonesia. Indonesia has a large, progressive population and the economic environment is very conducive for growth.”
Arshad Chaudhry, President Director of Nestlé Indonesia, added: “This significant investment in West Java, especially when coupled with our investment in East Java, means we will have the local capacity to strengthen our market leadership in Indonesia, while also delivering on our commitment to create shared value along our value chains. We will be able to create more employment, buy more local raw materials for our production and generate more economic activities.”
Construction of the multi-category factory is planned in two phases. The first, scheduled for completion by 2012, will see the creation of a 15-hectare complex for the production of Milo chocolate malt drinks and Cerelac infant cereal.
The second phase, earmarked for 2013 to 2015, will see an expansion to other types of product categories, such as breakfast cereals and value-added liquid milks.
The facility will apply advanced manufacturing principles to ensure its operations conform to the highest environmental standards. It will also meet halal requirements.
The latest investment boost also marks Nestlé’s drive to expand its Popularly Positioned Products (PPPs) business model in Indonesia.
Nestlé’s PPPs are fortified to specifically address some of the most common micronutrient deficiencies among lower-income consumers in emerging markets. Available in smaller or ‘daily-portion’ packs to be bought on a regular basis, PPPs are manufactured from local raw materials to minimise value chain costs.
Mr van Dijk explained: “As the world’s leading nutrition, health and wellness company, Nestlé has a responsibility to provide consumers with high-quality, nutritious products, regardless of where, and at which price point, we sell them.
“PPPs make a big difference in a country like Indonesia, where better nutrition positively impacts not only the health, development and education of lower-income consumers but also the local economy. They will continue to be one of Nestlé’s main growth drivers for the years to come.”