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Nestle plans $37mln investment

LAHORE: Swiss food giant Nestle plans more than $37 million investment this year to improve production capacity and reliability of its Pakistan’s operation.“Pakistan continues to offer great opportunities for foreign investment and growth,” Waqar Ahmad, head of corporate affairs at Nestle Pakistan, said. “However, consistent implementation of prudent economic policies

By Tariq Ahmed Saeedi
April 02, 2015
LAHORE: Swiss food giant Nestle plans more than $37 million investment this year to improve production capacity and reliability of its Pakistan’s operation.
“Pakistan continues to offer great opportunities for foreign investment and growth,” Waqar Ahmad, head of corporate affairs at Nestle Pakistan, said. “However, consistent implementation of prudent economic policies by the government remains crucial to unlocking the country’s full potential.”
Ahmad said the company has earmarked approximately Rs3.8 billion for 2015 to “increase operational reliability and capacity to meet the consumer needs”.
Nestle Pakistan, in which the world’s leading nutrition, health and wellness company Nestle holds 59 percent equity interest, wants to shield its milk supply chain from relentless energy crisis.
Widening gap between electricity supply and demand is biting people and crippling industrial production in Pakistan.
Energy shortfall is adversely affecting the farm-to-fork milk supply chains of food processors collecting milk from villages and towns in Punjab, which accounts for nearly three-fourths of the milk production in the country.
“A few initiatives in milk collection we are focusing include installation of solar water geysers, hybrid solar panels and biogas plants,” Ahmad added. “We will continue to do that.”
Nestle has been investing in its factories for over two decades. The largest annual investment was Rs10 billion ($100 million) made in 2013 to deploy a modern milk drying facility at its Sheikhupura factory.
The world’s fourth largest producer, Pakistan annually produces over 36.2 million tons of milk. Over 95 percent of dairy industry is informal and undocumented.
This huge untapped market is a bonanza for dairy processors, which are not just collecting and selling milk, but also promoting hygiene awareness in the local population to make them adaptable to packaged food.
The Nestle official said the government could play its role in bringing behavioral change.
“There should be a will and enforcement on the part of the government,” he said, citing an example of Turkey where government’s efforts to ensure quality and hygiene increased packaged milk share in dairy industry to 70 percent from 10 percent a decade ago.
“Regulatory bodies will play an important role in the supply-demand-price triangle of milk economics in Pakistan,” he said. “There is a need to frame national quality policy to ensure uniform standards nationwide.”