Nestle invests over Bt4 billion to expand operations in Thailand
Global food and beverage giant Nestle announced that it is investing more than Bt4.5 billion to expand production at its three factories in Thailand as well as improve its presence online.
This move will also expand the number of Nestle products that are available to Thai consumers.
Victor Seah, chairman and chief executive officer of Nestlé Indochina, said: “Even though this is a challenging year, Nestlé believes in the Thai market and sees strong potential for long-term growth.
“This is why we invested in three key factories, in Amata and Bangchan as well as the Navanakorn 7 UHT plant. They will serve increased demand in pet food, ice cream and UHT beverage markets.”
Strengthening pet food portfolio
With more people treating pets as friends and family, the demand for pet food in Thailand has increased substantially. Even with the Covid-19 outbreak, with many consumers reducing spending in other categories, pet food is still seen as a necessity.
They are also willing to pay more for better quality, premium products for their pets.
Nestlé is investing Bt2.55 billion to build a new factory in the Amata industrial estate to boost its production capacity and strengthen its pet food portfolio. Production will start in mid-2021.
Introducing product innovations
Nestlé’s factory in Minburi’s Bangchan industrial estate produces ice cream. To satisfy consumers’ need for indulgence, Nestlé continually introduces innovations into the ice cream market, such as mochi ice cream that rides on the market trend of Korean and Japanese ice cream flavours.
Nestlé allocated Bt440 million to expand production lines at the Bangchan factory in October this year.
Healthy products in green packaging
The new Navanakorn 7 UHT plant produces Nestlé's UHT product range such as Milo and Bear brand milk. Research from Nielsen shows that UHT products in the cow's milk and chocolate malt beverage categories will grow at close to 3 per cent over the next three years, demonstrating Thai consumers' preference for on-the-go products that are healthy and convenient.
To capture this opportunity, Nestlé allocated Bt1.530 billion, which began ramping up production in May 2020. This state-of-the-art facility reflects the global eco-trend by introducing recyclable packaging innovations. For example, Milo UHT is the first UHT product in Thailand to come with a paper straw, which aims to eliminate the use of over 500 million plastic straws in 2021.
In addition to supporting Nestlé's ambition to have 100 per cent recyclable or reusable packaging by 2025, these three factories have environmentally-friendly production processes that reduce the company's carbon footprint, energy use, water consumption, and greenhouse gas emissions while creating zero landfill.
Adopting technology to drive e-commerce
"Before Covid-19, the e-commerce market was expected to grow 30 per cent. But during Covid-19, we saw acceleration across all categories.
"To respond to digital trends, Nestlé established an e-Business team in 2018. Since then, we have made ongoing investments in both people and systems, with a total investment this year of Bt50 million.
“In addition, we have invested in building up our own marketing and advertising technology and data management systems. This will allow us to offer more personalised services, products, and communications that suit consumers' needs," Seah added.
