Nestlé earmarks over US$500M to expand its footprint in India by 2025

INDIA – Maggi noodles manufacturer, Nestlé has revealed plans to invest Rs42bn (US$507.5m) in its business in India between 2023 and 2025.

The Swiss giant confirmed to Just Food that Rs21.3bn (US$257M) has already been spent in the first half of 2023 in capital investments adding that the expenditure will go towards the company’s new food processing unit in Odisha, which was confirmed as the location for its tenth factory in India.

In May, as the company was exploring locations for its tenth factory in India, sources reported that the Swiss giant was considering the east, where it has no representation by a factory in the country.

India is Nestlé’s second-largest market in Asia by sales, and the company is working on expanding its footprint further in the country, establishing itself in all of India’s regions. 

Therefore, according to the company, the Odisha facility will be predominantly used to manufacture noodles but, depending on the market could be used to produce other products such as chocolate and confectionery.

Last week, Nestlé’s India business announced its results for the second quarter of the year, reporting better-than-expected earnings thanks to price increases and demand for its chocolates and packaged foods, including Maggi noodles.

The company’s revenue from operations hit Rs46.59bn for the period, climbing 15% year-on-year. Profit also spiked to Rs6.98bn.

Suresh Narayanan, chairman and managing director of Nestlé India, said in a statement: “This is the fifth quarter in a row of double-digit growth across all product groups.” Until 2020, the KitKat and Maggi maker had invested around Rs70bn in its Indian business.

In March 2023, Nestlé’s publicly-listed subsidiary in India reported a 21.3% rise in sales in the country during the first quarter of 2023, reaching US$588.5m. 

“This is the highest growth for [Nestlé India] in a quarter in the last ten years, excluding the exceptional quarter in 2016, which was off a low base in 2015,” Suresh Narayanan, the chairman and managing director of Nestlé India, said. 

This planned expansion in India will likely see Nestlé perform even better in sales generation upon completion. Moreover, the Swiss food giant said it is weighing up the options for a coffee factory in the same country.

For all the latest grains industry news from Africa, the Middle East and the World, subscribe to our weekly NEWSLETTERS, follow us on LinkedIn and subscribe to our YouTube channel