Nestle's Indonesian investment: MNC pumps in USD100m to increase production by 25%

By Guan Yu Lim

- Last updated on GMT

Nestle's Indonesian investment: MNC pumps in USD100m to increase production by 25%

Related tags Nestlé expansion Milo Nescafe

Nestle is increasing its Indonesian production capacity by 25% through the expansion of three of its factories in Karawang (West Java), Kejayan (East Java) and Panjang (Lampung).

The USD100m investment will build a new production line for Nestle’s liquid drinks such as Milo, Nescafé Ready to Drink, pure sterilised milk Bear Brand and Maggi seasoning.

Debora Tjandrakusuma, director of PT Nestlé Indonesia said: "The investment will increase our production capacity and produce not only more of our current products, but also newer products that we want to introduce to the market​.

"Indonesia has shown promising growth opportunities, and we recognise that the conducive business environment has allowed for a growing demand for our products.

"Through this expansion, we will be able to meet the growing demand and provide even more nutritious and tasty products that Indonesian families love, in line with our purpose of enhancing quality of life and contributing to a healthier future for Indonesian families​.

"One of the ways we do this is by providing fortified products with the big 5 nutrients; iron, zinc, vitamin A, iodine and vitamin D. Some of our fortified products include DANCOW and CERELAC​."

In 2018, Nestlé Indonesia also launched an improved MILO recipe with 25% less sugar, which was also enriched with vitamins and minerals.

Nestle has been operating in the country for 48 years, and current products manufactured in the country are Cerelac infant cereal, Milo chocolate malt drink, Dancow and Lactogrow milk powder as well as Nescafé instant soluble coffee and coffee mixes

Works at all three factories are expected to be completed and start operations in 2020.

First half financials

The company also recently announced its half year financial report. Its global sales increased 3.5% to USD45.8bn, compared to the same period last year (USD44bn).

Asia, Oceania and sub-Saharan Africa (AOA) contributed USD10.8bn of sales and reported growth of 3.3%. The AOA region is second in sales, only behind the Americas.

According to the report, South East Asia experienced strong growth, contributed by Indonesia and Vietnam from the Bear Brand, Nescafé, and Milo.

Elsewhere in APAC, Japan, Oceania, China have shown positive growth too, with brands such as NAN, Maggi and KitKat performing well.

Nestle was recently awarded “Most Valuable Food Brand” by Brand Finance​.

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