Nestle brews a local caffeine boost

The international nutrition and wellness giant has underscored its dedication to the domestic coffee industry through investment in a new $238 million Nescafé plant, combined with the continued implementation of a wider development plan which has contributed to rejuvenating the country’s aging coffee plantations, improved farming skills and added value to Vietnam’s coffee products.

Nescafé started as an idea to solve the problem of what to do with unsold coffee in the 1930s, and now celebrates its position as one of the world’s favourite drinks. Today an incredible 5,500 cups of Nescafé instant coffee are consumed every second, catering for a wide variety of different tastes and preferences around the globe.

Nestlé’s commitment to increased investment in Vietnam is tied to the country’s role as a leading global robusta coffee producer.

Chairman and CEO of Nestlé Indochina Wayne England and Nestlé Vietnam’s managing director Rashid Qureshi inaugurated a new Nescafé factory located at the Amata Industrial Zone, Bien Hoa, Dong Nai province this July. This inauguration confirmed Nestlé’s confidence in, and commitment to Vietnam, said England.

The new facility, worth 230 million Swiss francs or $238 million, produces Nescafé both for local consumption and for export, creating more than 200 new jobs and many more indirect jobs. This underlines Nestlé’s commitment to Vietnam and to Nescafé, one of the company’s key brands worldwide, England said.

The Nestlé Tri An factory uses Nestlé’s state-of-the-art soluble coffee technology and is dedicated to meeting growing consumer demand for Nescafé products in the region, said Vietnam technical director Santiago Vila.

“Nestlé has built a state-of-art coffee manufacturing facility, allowing us to contribute to Vietnamese society by bringing added value to the domestic coffee industry,” Vila said.

England elaborated that the plant was an extension of Nestlé’s global production line, meeting the most stringent environmental standards and employing the most modern technologies.

The factory underlines Nestlé’s green credentials by dispensing of oil or gas to power its roasting section and production lines. Instead, it re-uses ground coffee for heating, helping minimise waste.

England added the facility would significantly increase production of high-quality Nescafé products primarily made by locally sourced raw materials for both domestic and international markets. “More importantly, it will employ more than 200 people, create additional indirect jobs and foster the sustainable development of the province.  This is an accomplishment that we are truly proud of.”

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. Between 1995 and 2012, Nestlé 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.

In 1998, the first Nescafé products made in Vietnam were produced at Nestlé Dong Nai.  Since then, Nescafé has become familiar with Vietnamese consumers.

In addition, the Nescafé Plan – a $518 million investment in coffee projects by 2020 – has a set of global objectives which aim to help the company further optimise its coffee supply chain, including an increase in direct purchasing from farmers with additional technical support and training for producers. In Vietnam, Nestlé annually distributes two million highly productive and disease resistant coffee plantlets to growers. The project has helped to save 246,000 litres of water per hectare, and reduced fertilizer usage by 15 per cent. In addition, some 20,000 farmers are trained annually in Nestlé Best Farming Practices.

Nestlé has also inked a deal with the Western Highlands Agriculture and Forestry Science Institute to implement a coffee farming renovation scheme to address Vietnam’s aging coffee plantations. The company is working via a public-private partnership with the Ministry of Agriculture and Rural Development to improve coffee productivity through innovated farming practices.

“Vietnam is a very important part of Nestlé’s Indochina business and our continued commitment and ongoing investments demonstrate our confidence in Vietnam,” said England.

“The establishment of this new factory reflects more than just investment to expand our business; it also illustrates our commitment to a country in which we have had very successful operations for many years and where we will keep promoting agricultural growth and continue to ensure the sustainable use of natural resources. We are committed to growing here, while creating shared values with the local community, and we are very grateful to the local authorities, partners and staff who have helped us to achieve this goal.”

The inauguration of the new factory marks a new step for Vietnam’s coffee industry as it signifies a significant shift from exporting raw materials to shipping high-valued soluble coffee, said Phan Thi My Thanh, deputy vice chairwoman of Dong Nai province’s people’s committee.

Nestlé Vietnam’s managing director Qureshi concluded, “This investment marks another step in our long-term presence in Vietnam. We aim to create value in the long term wherever we operate. We do so by sourcing locally, creating employment, offering nutritious products and helping the further development of the country.”