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Nestle Investing in Greenfield Factory in Russia

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Nestle Investing in Greenfield Factory in Russia

June 30
11:12 2010

Nestle Rossiya is investing SFr60m (Eur45m) in the construction of a greenfield factory in the Vyazniki district of Vladimir region (some 300 kilometers east of Moscow) to produce a wide range of culinary products under the Maggi brand. When the first phase of construction is completed in the third quarter of 2011, the new plant will produce more than 30,000 tons of Maggi products to meet the growing demand for these products in Russia and CIS countries. The state-of-the-art factory will create 500 new jobs.

The development of the new factory is part of Nestle’s strategy to consolidate its production operations in Russia. After the investment project is completed, Nestle will transfer its culinary production out of the current site located in the town of Zhukovsky, in the Moscow region, to concentrate operations at the newly constructed plant.

With sales of around SFr2b in 2009 in Russia, Nestle is market leader in coffee, chocolate, infant cereals and culinary products.

The Zhukovsky factory will then be fully focused on ice-cream production and will be expanded with the transfer of production lines from Nestle’s Kuban factory located in Krasnodar region. Coffee production at Nestle Kuban will subsequently be expanded after the launch of freeze-dry technology in 2011.

“We believe in Russia’s huge long-term potential, that’s why we continue with Nestle investments into the development of local production facilities. With the new factory in Vladimir region Nestle opens a new chapter of Maggi business and sets a new standard for technology in culinary production in Russia,” says Stefan De Loecker, chief executive of Nestle Rossiya. “Our new investment projects and optimisation of production facilities will allow the company to use existing resources held by the Nestle group of companies in Russia with maximum efficiency, as well as to develop successful brands and strengthen positions in the Russian culinary and ice cream markets.”

Over the past 15 years, Nestle has build up a strong presence in Russia. The new plant will be the group’s 14th production site in Russia. With double-digit growth rates and sales of around SFr2b in 2009 in Russia, Nestle is market leader in coffee, chocolate, infant cereals and culinary products.

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