Concentration of the Group's Strategic Businesses

   
Back to News archiveVevey,Aug 2, 2000

Nestlé continues its policy of developing its strategic sectors and divesting activities outside its core business.

Thus, in South Africa, Nestlé has acquired two local mineral water businesses – Valvita and Schoonspruit – which, together hold more than 20 per cent of the local market in bottled water, a sector which is demonstrating very rapid growth of more than 30% a year.

This transaction, which is subject to approval by the local regulatory authorities, marks the entry of the Nestlé Group into the local mineral water sector in the African continent after the purchase of Baraka in Egypt, some years ago, by Vittel.

Perrier Vittel S.A, the bottled water business unit of Nestlé, already exports a number of its international mineral waters to Africa, and is the world leader in bottled mineral water with 68 brands and operations in 27 countries. This agreement was preceded this year by several acquisitions in other strategic sectors of the Group such as the petfood business (Cargill, Argentina), nutrition (PowerBar, U.S.A.) and culinary products (Kraft bouillons and soups in Mexico).

In the United States, Nestlé has also signed an agreement with J.R. Simplot Company, a privately-held agribusiness company with a strong position in the area of food service side-dish business. J.R. Simplot Company will acquire the US operations of the Nestlé Group in the production and marketing of frozen potato products, principally for the restaurant trade. The agreement includes the sale of the three Nestlé U.S.A. factories located at Moses Lake and Othello (Washington State) as well as Nampa (Idaho). The activities divested represent annual sales of more than USD 300 million.

This divestiture, which is subject to approval by the US regulatory authorities, follows similar moves previously announced, notably concerning the processing of cocoa in Italy and Malaysia, certain activities in the frozen foods business in Europe and also the Vismara cold meats business (ham, salami, mortadella) in Italy.