Nestle invests Sh750 million to upgrade production line

Nestle, the world’s leading food company, has expanded its production capacity by installing a Sh750 million production plant in Kenya in what market analysts said was intended to strengthen positions ahead of the expected launch of new beverage and sweets products from Kraft Foods.

Kraft Foods recently bought out chocolate-maker Cadbury.

American firm Kraft Foods succeeded in a hostile bid to buy Cadbury, the makers of top selling Dairy Milk chocolate bar and sweets distributed in Kenya.

It is expected to introduce new beverage products in Kenya to rival Nestlé.

The expanded production line is intended for the out-of-home market also known as take-away service that would be located in several hotels across the country.

The launch of the new production line in Nairobi follows the successful launch in Switzerland two years ago and subsequent launches in other regions.

Nestlé’s expansion was announced by Nestlé SA board member Friedrich Mahler and head, Equatorial region, Pierre Trouilhat. 

“Kenya has been logistically advantageous in accessing other regional markets, especially in the East African Community and the Great Lakes. The plant upgrade will see the introduction of a new production line dedicated to the production of Nestlé Professional products,” said Mr Trouilhat.

Nestle’s new strategy lies in the take-away service, which it says is gaining currency among the young buyers.

According to Nestle, researches it has conducted in Europe, Americas, Asia and Africa  have revealed that consumers are spending more on out-of-home food and beverages, a trend which is set to continue.

“There are some core trends that are influencing the out-of-home market: the increase in demand for ‘on the go’ food and beverage in line with flexible and busy work and lifestyle, an increase in demand for great tasting café-style coffees to compete with the high street, and a move towards health and well being,” said Mr Caira.  

Nestlé’s headquarters in Nairobi oversees operations in Kenya, Angola, Burundi, Comoros island, Democratic Republic of Congo, Republic of Congo, Djibouti, Eritrea, and Ethiopia.

It is also responsible for operations in Madagascar, Mauritius, Mozambique, Malawi, Rwanda, Seychelles, Somalia, Tanzania, Uganda, Zambia and Zimbabwe.  

Great opportunity

The new production line will supply Kenya, Uganda, Tanzania, Rwanda, Burundi, Eastern DRC, Malawi, and Zambia.