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Nestle India commits Rs 6,000-6,500 cr investment by 2025
Industry News- Feb 13,24
Nestle India had previously committed to investing Rs 2,000 crore between 2000 and 2020, and in 2022, it announced an additional Rs 5,000 crore for expansion, slated for investment by 2025.
FMCG giant Nestle is set to expand its manufacturing presence and operations in India with an investment ranging from Rs 6,000 to 6,500 crore between 2020 and 2025, aiming to meet the surging demand, according to Suresh Narayanan, the Chairman and Managing Director of Nestle India. Narayanan highlighted that the company's investment in the last five years exceeds the cumulative investment made in the previous 20-25 years, reaching Rs 7,000 crore from its inception until 2020.
Nestle India had previously committed to investing Rs 2,000 crore between 2000 and 2020, and in 2022, it announced an additional Rs 5,000 crore for expansion, slated for investment by 2025. Narayanan noted that after deducting common investment years, the net investment between 2020 and 2023 is approximately Rs 5,800 crore, with Rs 3,200 crore already invested by 2023.
The company, renowned for brands such as Maggi, Nescafe, and KitKat, is establishing its tenth factory in Orissa. Nestle India plans to double its coffee business, enhance chocolate production, expand its distribution networks, and increase capacities for prepared dishes, primarily the Maggi range.
Narayanan anticipates total investments of Rs 6,000 to 6,500 crore by 2025, underscoring the sustained demand for Nestle products and the company's commitment to the "Make in India" philosophy. In 2023, Nestle India's sales surpassed Rs 19,000 crore, making India one of the top ten markets for Nestle SA.
Narayanan expressed optimism about Nestle India's growth trajectory, citing a consistent 11-12% year-on-year growth from 2016 to 2022, coupled with improved profitability. He emphasised the positive outlook on India and the strong support from equity goodwill.
Regarding market dynamics, Narayanan highlighted the robust urban market, with 93% penetration for Nestle products, up from 80% five years ago. Additionally, penetration in smaller tier II, III, IV, and V markets has increased significantly. The company's capex has risen to 8% of turnover, a substantial increase from 2-3% in the past seven to eight years.
Nestle India remains committed to innovation, having launched 130 new products in the last seven years. The company is leveraging AI-enabled analytics for sales automation, with approximately 40% of media expenses allocated to digital channels. In the December quarter, Nestle India contributed 7% to domestic sales.
Source: Indiatimes
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