Nestle plans tenth factory in India; investing to augment capacity of existing units

FMCG major Nestle India is planning to open a new factory to meet the growing demand here and is scouting for the ideal location, its Chairman & Managing Director Suresh Narayanan said. This would be the tenth factory for Nestle India, which last year announced to invest Rs 5,000 crore in the country by 2025 to accelerate its core business and leverage new growth opportunities.
When asked about the possibility of a new factory in India, Narayanan told PTI: “Certainly. There is scouting for a site for the tenth factory”.
“We will make up our minds sooner than later. There is some preliminary work that has been done. And then we will come with an announcement,” he added.
Nestle is looking at numerous places, however, Narayanan said it will be eastern India where it is not having any production units.
“One of the areas that we do not have a representation of a factory is in the east. So, clearly, if you are able to get a good geography and locational fit, we would like to look at the east but at the moment, there are others in the valuation,” he said.
Besides, Nestle India, as part of its Rs 5,000 crore investment, is expanding its capacity.
At Sanand, which is its latest plant, construction of the second phase has been started and the third phase also has been approved. It is also expanding capacity at other plants.
“About one-third of the investment that we have envisaged, about Rs 1,500 to 2,700 crore will get executed in the next year or two and the rest of that subsequently,” he added.
When asked about competition with the entry of billionaire Mukesh Ambani-led Reliance in the FMCG segment, especially in the value-added dairy segment as per some reports, Narayanan said, “I am a great respecter of competition. I respect the competitor and I respect the intentions that they would have”.
“We play to the strengths of Nestle. So, we also know about brand marketing and building propositions over a period of time. And while I respect the competition, I don’t fear it because I think as a company, we have the wherewithal, we have the ecosystem, the footprint to be able to take care of it,” He added.
Reliance Retail has roped in dairy industry veteran RS Sodhi.
Narayanan said that today’s consumers are not choosing products simply because of the price.
“They choose products because they seek value and the value can come at a higher price point, provided they see the merit of the brand in terms of quality efficacy and nutrition. And that’s really how the Indian consumer is behaving. That is the strength of our brand,” he said.
Source: Economictimes