Nestle claims decades-long losses

photo source: nestle.com.vn

A recent report from the Dong Nai Industrial Park Management Authority to the Ministry of Planning and Investment said that Nestlé Vietnam still reported losses although the company has expanded operation with the recent opening of  another large factory in the province.

“Since its establishment, Nestlé Vietnam has had accumulative losses of nearly $30.8 million, accounting for 20 per cent of its equity,” said the report.

  Despite reporting accumulative  losses, Nestlé Vietnam’s corporate affairs director Vu Quoc Tuan told VIR  that Nestlé Vietnam had made profits in the four years of 2007, 2008, 2011 and 2012.

“We’ve been in the black from the beginning of the year to date, and the reported accumulative losses have decreased significantly,” said Tuan.

Nestlé Vietnam was previously been heralded by the Dong Nai provincial Department of Taxation for excellent completion of tax duties in 2009 and 2012, contributing millions of dollars to the state budget in each profitable year, Tuan claimed.

Despite losses, Nestlé Vietnam has aggressively expanded its business in the country. Between 1995 and 2012, Nestlé Vietnam boosted its capital investment in the country to $450 million from $25 million. In addition, La Vie, a Nestlé Vietnam arm, expanded the capacity of its two mineral water factories, with more than $25 million invested between 2009 and 2012.

The inauguration of a new $238 million Nescafé factory in early July shows that Nestlé Vietnam sees the potential of Vietnam’s long-term  coffee market development.  

Nestlé Indochina president cum chief executive officer Wayne England said at the inauguration of the new Nescafé plant in Dong Nai province last month that Vietnam was a very important part of Nestlé’s Indochina business.

Nestlé currently operates five factories in Vietnam, with the latest becoming the largest coffee factory in the country, and employs more than 2,000 people nationwide.