Nestle plans 10th factory, investing to augment capacity of existing units

Suresh Narayanan, Chairman and Managing Director of Nestle India, said the company is planning to open a new factory to cater to the growing demand here and is also exploring an ideal location.

It will be the tenth factory for Nestle India, which last year announced an investment of Rs 5,000 crore in the country by 2025 to accelerate its core business and tap new growth opportunities.

When asked about the possibility of a new plant in India, Narayanan told PTI, “Sure. There is an exploration for the location of the tenth plant.”

“We will make our decision sooner rather than later. There is preliminary work done. After that we will come up with an announcement,” he added.

Nestle is looking at several places, however, Narayanan said it will be eastern India as it does not have any production units.

“One of the areas where we don’t have plant representation is in the east. So, obviously, if you’re able to get a good geography and fit in a location, we’d like to look east but for now, there are others in the evaluation,” he said.

Besides, Nestlé India, as part of its Rs 5,000 crore investment, is expanding its capacity.

In Sanand, which is its newest plant, construction of the second phase has been started and the third phase has also been approved. It is also working to expand capacity in other factories.

He added, “About a third of the investment we expected, about Rs 1,500 to 2,700 crore will be done in the next year or two and the rest later.”

When asked about the competition with billionaire Mukesh Ambani-led Reliance entering the consumer goods sector, especially in the value-added dairy segment according to some reports, Narayanan said, “I deeply respect the competition. I respect the competitor and I respect the intentions they may have.”

“We play to the strengths of Nestlé. So, we also know about brand marketing and building a proposition over a period of time. And while I respect the competition, I’m not afraid of it because I think as a company, we have enough money, we have the ecosystem, the footprint to be able to take care of with it.”

Reliance Retail has roped in dairy industry veteran RS Sodhi.

Narayanan said consumers today don’t choose products just because of price.

“They choose products because they are looking for value and value can come at a higher price point, provided they see the brand advantage in terms of quality and nutrition efficacy. And that’s really how the Indian consumer behaves. That’s the strength of our brand.”