Nestlé targets low end market, exports

NESTLÉ Zimbabwe has commissioned new product lines as it targets the low end market.

BY TARISAI MANDIZHA

Industry and Commerce minister Mike Bimha (right) cuts the ribbon at the commissioning of Nestle’s affordable product lines in Harare. Looking on from left are managing director Ben Ndiaye and Swiss ambassador to Zimbabwe Ruth Huber.

The Nestlé affordable product lines have capacity to produce 5 000 cartons per week and will contribute 10% to the group’s total revenue by year-end, managing director Ben Ndiaye said at the commissioning of the lines yesterday.

The new filling and packaging machinery will produce affordable products namely Cremora 40g, Cerevita 30g, Cerevita flakes with milk 45g, Cerelac 50g and Everyday milky tea 25g which cost less than 50 cents.

Ndiaye said since 2011 the group has invested $30 million in Zimbabwe.

“Our ambition is to make sure that by year five this [affordable product lines] will represent 50% of our total revenue. This year we want it to be 10% of the total revenue,” Ndiaye said.

He said the company was currently operating at 75% capacity utilisation and has begun exporting to the regional market.

“Since 2011, Nestle Zimbabwe has invested to increase capacity, build a new administration block and laboratory, refurbished and upgrade the Egro for milk powder production and Cremora, and build the unique water treatment plant in the country. And today, after the Cerelac with prior biotics launch, we are talking about other investment related to innovation,” Ndiaye said.

“On top of the investment on filling and packaging lines and building, innovations requires high investment especially in R& D [research and development], in marketing and indeed in people and these are critical ones that need to be highlighted.”

Ndiaye said the company has begun exporting to Zambia and was in discussions with Mozambique, Malawi, Nairobi and South Africa.

“We have already started to send the first Cremora and the first Cerevita in Zambia and will continue with the other markets and other products. This is important for our strategy because we believe that with the capacity we have here, it is an opportunity for us to explore the foreign market,” Ndiaye said.

Industry and Commerce minister Mike Bimha said Nestlé has made great progress in technological advancements, evidenced by the commissioning of the upgraded and refurbished milk and creamers production plant to international standards in December 2015, a positive step in their capital investment journey started in 2011.

“The new product range is an exciting development not only for Nestlé Zimbabwe being in the forefront of increasing their industrial foot print in the country, but also in Nestlé contribution to economic development and employment creation along the value chain, from the farmers right to up to the commercial sector,” Bimha said.

He said the confidence which Nestle was showing gave positive signals to other foreign investors that Zimbabwe was open for business.

“My ministry supports endeavours to promote availability of affordably priced locally manufactured good products targeted at serving the low income market niche at the same time buttressing government initiatives to support local industries,” he said.

Nestlé Zimbabwe is a unit of Nestlé SA, a Swiss transnational food and drink company.