As the world’s largest food and beverage company, Nestle SA is planning to invest Rs 5,000 crore in India in the next three and a half years.
This investment is subject to clearances and approvals and will be on capital expenditure. The investment will help in setting up plants, expanding the product portfolio of the company, developing work, and brand building.
“The investment I talked about—that’s CAPEX, that’s us putting money into our facilities, be it factories or research centres. On top of that, if we see interesting opportunities for mergers and acquisitions, we would be very, very happy to explore those,” Chief Executive Mark Schneider said on Friday.
“When you look at the investment in this country and the investment plan through 2025—we’re talking about Rs. 5,000 crore, and that compares to Rs. 8,000 crore over the last 60 years when we started manufacturing in this country,” he said.
“Globally, we are facing a bad situation of continued inflation. You saw just this week from so many central bank decisions that clearly, inflation continues to be a pretty major concern. And obviously, what we watch country by country, market by market is to what extent; continued inflation at some point has an impact on people’s willingness to buy, and the answer to that is different by country and by category,” he added.
The fresh investments will help the company accelerate its core business in the country and leverage new opportunities for growth in well-established and emerging categories, he said.
Today, 99 percent of what Nestle sells in India is made in India and the company also has a global R&D centre in the country.
In 2020, the company announced an investment of Rs 2,600 crore to augment its capacities and for its factory in Sanand.
Nestle operates nine plants in India and is looking at new locations to set up more manufacturing units. The company has been present in India for over 110 years. The company is in the 10th largest market globally.
Nestlé India Chairman and Managing Director Suresh Narayanan said accelerating the core business of the company would be a focus area.
“(The plan) has three pivots, one of which is continuing the strong momentum of growth the company has had in the last 22 quarters,” Narayanan said.
When asked about investment and capacity details segment-wise, Narayanan said: “It is going to be secular across categories.”
Nestle India’s revenues in 2021 stood at Rs 14,709.41 crore. It had last invested around Rs 700 crore to open its plant in Sanand to manufacture a range of Maggi noodles.
“This additional investment could mean the company is looking at new levers of revenue growth … this could mean entry into a new category as well,” said Sachin Bobade, vice-president, of Dolat Capital.
Nestle operates nine plants in India and is looking at new locations to set up more manufacturing units. The company has been present in India for over 110 years. The company is in the 10th largest market globally.
Nestle has been present in India for over a century and Schneider shared that in the last 60 years since Nestle began manufacturing in India, it has invested over Rs 8,000 crore in its operations here.
