Nestlé in $1bn push to up its African focus

City A.M. Reporter
NESTLÉ, the world’s biggest food group, will invest about 1bn Egyptian pounds (£107.5m) in Egypt over the next three years in a push to shift its focus to emerging markets, an executive said.

The maker of KitKat chocolate bars and Maggi soups wants at least 40 to 45 per cent of its business to come from markets like Brazil, China, Ghana and Vietnam within 10 years, up from about 30 per cent now, executive vice president Frits van Dijk said.

“In 2009, we saw double-digit organic growth (in emerging market top line), and this trend will continue. In emerging markets we will have strong growth,” said van Dijk, who is also zone director for Asia, Oceania, Africa and the Middle East.

Overall, Nestlé is planning to invest $1bn (£625.6m) in Africa over the next two years and open six new factories on the continent by 2012, including one in Algeria and another in the Democratic Republic of Congo.

One factory is planned to open in Mozambique to take advantage of a Chinese-built railroad linking the country’s coast to Zambia, van Dijk said.

“We are seeing time and again where infrastructure starts to develop, that’s where the hinterland is being opened up and you see a lot of trading, and therefore disposable income becomes available,” he said.

He said Nestlé sales were flourishing in countries including Vietnam, Indonesia, Chile, Columbia and Mexico, alongside Brazil, India and China.

Nestlé will invest £450m in Egypt this year and another £500m over the following two years, compared with about £1bn over the last decade, van Dijk said.