Nestlé plans to invest $270 million (over CHF 230 million) in a new coffee factory in Vietnam to reinforce its global Nescafé Plan and commitment to the country.
The factory, to be located in Dong Nai province and fully operational by 2013, will produce products under the Nescafé brand for both local consumption and export.
The Company’s latest investment supports its CHF 350 million Nescafé Plan, launched in August 2010, which brings together Nestlé’s pledge to sustainable coffee farming, production and consumption under one umbrella.
In addition, the factory—set to create 200 new jobs and a number of indirect jobs—will also showcase state-of-the-art process technology and focus on energy and water savings.
Paul Bulcke, Chief Executive Officer for Nestlé, explained the significance of the Company’s latest commitment to Vietnam.
He said: “Today’s investment is fully aligned with the global Nescafé Plan, launched just a year ago, which brings our commitment to support responsible coffee farming, production and consumption together.
“They are a clear demonstration of our commitment to Creating Shared Value, which is Nestlé’s way of doing business. Creating Shared Value is the expressions of our conviction that only by creating value for society as a whole can we create long term value for our shareholders.”
Under the Plan, over the next five years in Vietnam, Nestlé aims to significantly increase the amount of Nescafé coffee bought directly from farmers and their associations, looking set to purchase 30,000 tones of coffee from around 16,000 farmers every year.
Furthermore, the Company is working together with the Vietnamese Ministry of Agriculture and Rural Development to improve coffee productivity through better farming practices, as well to distribute high-yield, disease-resistant plantlets.
Ultimately, Nestlé aims to engage with 20,000 Vietnamese coffee farmer households within five years.
The Nescafé Plan
The Plan—as part of Nestlé’s CHF 500 million investment in coffee projects by 2020—has a set of global objectives which aims to help the Company further optimize its coffee supply chain, including an increase in direct purchasing as well as technical assistance programs for coffee farmers.
It builds on the CHF 200 million the Company has already invested in the coffee industry over the past decade.
The Nescafé Plan comes on top of Nestlé’s Cocoa Plan, launched in October 2009, a CHF 110 million investment to improve the sustainability of the cocoa industry which includes the distribution of 38 million high-yield disease resistant cocoa plantlets over the next ten years.
Nestlé in Vietnam
Nestlé operates four factories in Vietnam employing more than 1,500 people nationwide.
Nestlé Vietnam offers consumers a variety of products including Nescafé, La Vie, Milo, Maggi, Lactogen, Nan and Cerelac.