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September 11, 2020

Nestle readies more investment in China

The Swiss giant is ploughing cash into a range of areas, from dairy farming to "adult functional foods".

By Dean Best

Nestlé has set out a range of investment projects in China, from spending on organic grain and boosting dairy farming to launching “adult functional food” products.

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The Swiss giant is ploughing CNY400m (US$58.5m) into initiatives that will “improve the sustainability of the agricultural sector”, as well as boost its production capacity in the province of Heilongjiang.

Nestlé is setting up a centre to promote the development of grain cultivation in China’s northernmost province, initially focus on organic versions of the crop.

In Shuangcheng, a district outside Harbin, Heilongjiang’s capital, will expand its “dairy farming institute”, with a larger cow herd and therefore fresh-milk production. Nestlé said the investment would help grow its production of infant formula in China.

Meanwhile, over the next five years, Nestlé will look to expand its factory in Shuangcheng, where it makes products including dairy foods, breakfast cereal, infant formula and baby food.

Nestlé plans to increase the production capacity for Gerber infant cereals at the plant by more than 50%.

The company is also set to launch two more product categories, including infant cereal-based snacks and adult functional foods.

Nestlé started manufacturing the Gerber Nutripuffs infant snacks at the Shuangcheng site earlier this year but a spokesperson said the new snacks were different, without providing further details.

The “adult functional foods” centre on milk powder and protein powder, the spokesperson added. Manufacturing will start later this year. It will be the first time Nestlé has produced this type of product – which the company says has been “clinically proven to increase bone density” – in China.

In July, Danone set out a series of investments in China, with the French giant’s infant-formula and medical-nutrition businesses getting funds for expansion.

China is Nestlé’s second-largest market by sales. Nestlé’s sales in Greater China were CHF6.91bn (US$7.6bn) in 2019, according to the company’s annual report.

In May, Nestlé outlined an investment package worth CHF100m to made in the Tianjin Economic-Technological Development Area (TEDA), also in the north of the country.

As part of the programme, Nestlé will build its first production facility in Asia for plant-based products.

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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