NESTLE Philippines Inc. is investing P2 billion in a new factory in Lipa, Batangas to process protomalt—a malt extract that is a key ingredient in its Milo malt and chocolate powder drink.
Jacques Reber, Nestle Philippines chairman and chief executive officer, told a press conference on Tuesday that the new 5,400-square meter malt factory would be an addition to two plants in the same compound in Lipa that produce Milo and breakfast cereals.
Reber said the new factory would provide for the 35,000-ton demand for malt in the Philippines to date for the production of Milo.
He said the Philippines is the second largest market of Milo in the world next to Malaysia.
The Nestle Philippines chief said they chose the country to build their fourth protomalt factory because the group trusts Nestle Philippines to develop a new factory, and it’s a key market for Milo.”
He said Milo has a 90 percent penetration rate in Philippine households, meaning nine out of 10 households in the Philippines consume Milo.
The Philippines is the eighth largest market for Nestle worldwide, the second biggest in Asia, and its No. 1 market in the Southeast Asian region.
“We do believe in the potential of the Philippine market. And we do believe in the future of the Philippines and Nestle Philippines. We continue to invest in a big way,” Reber said, citing that the group has so far invested P14 billion in the past five years in the Philippines.
“The new Milo malt plant is a concrete demonstration of our commitment to the Philippines.
Construction of the new Lipa malt factory started in December last year and is expected to be completed by October 2017 and operational a month after.
With an initial capacity to produce 35,000 tons of malt yearly, Nestle Philippines Technical Director Peter Douglas Winter said the factory is designed for “doubled up capacity,” but it would take the company at least two years to fully utilize that capacity.
Nestle Philippines reported 4 percent revenue growth in 2015 to P121 billion from P116 billion in 2014.
With the P2-billion investment in the new factory, Reber said the company is confident of growing its sales this year at a faster rate than the 6 percent to 7 percent growth of the Philippine economy.
The fifth largest corporation in the country, Nestle Philippines is a food and beverage manufacturer that has been operating here for 105 years. Its brands include Nestle, Nescafe, Milo, Nido, Bear Brand, Coffee Mate, Nestea, and Nesfruta for ready-made liquid drinks and powder mixes, as well as Maggi for cooking mixes, Kitkat for chocolates, Gerber for infant food, and Alpo and Purina for pet food and care products.
As of June 2016, it has 3,782 employees locally at its five factory compounds located in Cabuyao, Laguna; Cagayan de Oro; Lipa, Batangas; Pulilan, Bulacan; and Tanauan, Batangas. It has also deployed 80 workers in other Nestle units abroad.
Worldwide, Nestle employs over 335,000 people in more than 150 countries