Nestle said it wants to build one of the most “efficient and competitive” ice cream factories in Spain with the expansion of its Araia facility.
The firm on Wednesday (19 May) announced an investment of EUR10.3m (US$12.7m) in the region with the addition of six lines at the ice cream plant, which will create 200 jobs.
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A spokesperson for Nestle told just-food that the investment was purely about efficiency and not based on any rise in sales, a figure the company declined to disclose.
“At this moment it is purely about efficiency. What we expect with this concentration of production is to build one of the most efficient and competitive ice cream factories in Europe and cover our internal sales. Currently around 27% of our production is for export, but in the future this will probably increase once the factory is at full capacity.”
Nestle said the investment followed a decision to concentrate all of its activities and production of ice-cream into the Araia region.
“One year ago we sold a factory in Spain to Lactalis and so, as a result, production has been moved to Araia and this investment will complete the concentration into this factory.”
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By GlobalDataDespite the investment being made at a time of economic uncertainty, Nestle said its plans are to cover its ice-cream sales in Spain with its own production.
“We want to have a very competitive infrastructure in Spain and at the same time we want to cover all of our sales in Spain with our own production,” the spokesperson said.
Nestle said it holds the “number one” spot in Spain’s take-home ice-cream sector, holding off competition from the likes of Unilever.
“The market is split into two main segments, one of them is still very small, that is the retail one and we are leaders in the out of home segment. It is not officially tracked by Nielsen but our figures give us the first position,” the spokesperson said. “Our main competitor in the market is Unilever…it is a very powerful brand.”
However, in Spain, private-label products are “very big”, the spokesperson said, with the share of own-label in the country’s grocery sector growing from 33.9% in 2007 to 40% in the year to 21 May.
“In the [Spanish] market, private label is really the clear winner and in the case of ice-cream the weight of private label is even higher,” she said.
Nestle said it is in the last stages of completing a EUR42.5m facility in the country for its Nescafe Dolce Gusto brand, which is expected to finished in October. Beyond that, the firm said it has no immediate plans for further investment in Spain.
