Nestlé to nourish new focus to enrich Sri Lanka

Plans to invest Rs. 10 b in the next 5 to 8 years to expand operations in Sri Lanka which currently provides highest sales revenue per capita in Asia

By Deepal V. Perera

Nestlé Lanka PLC, the Swiss-based multinational company which has been operating in Sri Lanka for well over 100 years, announced that it would be investing Rs. 10 billion to improve operations here within the period of five to eight years.

Managing Director Alois Holfbauer –  Pic by Manoj Ratnayake

“There is renewed focus on Sri Lanka due to the new-found stability in the country. As a result, Sri Lanka has become a land of opportunities and therefore Nestlé has renewed its focus on Sri Lanka. We will be expanding our presence in the country with new investments worth Rs. 10 billion in the next five to eight years,” Nestle Lanka Plc Managing Director Alois Holfbauer told the Daily FT.

He said that Nestlé has been in the country for the past 105 years and in terms of its revenue in sales, Sri Lanka stood tall in the region with highest sales revenue per capita.

“In the Asian region, our highest sales turnover is generated from Malaysia, followed by The Philippines. But despite the size of the market, our highest sales turnover per capita for a country per se in the Asian region is generated from Sri Lanka. This is mainly due to fact that we offer different varieties of products in the country and 90% of the products we sell in Sri Lanka are made within the country using local ingredients,” he noted.

Holfbauer asserted that Nestlé has a strong presence in the country and ensured over 1,000 direct and indirect employment opportunities.

In terms of the management team, 99% of the company’s staff consists of locals, who have received a great deal of overseas experience by working in other countries.

With the new opportunities emerging in Sri Lanka, the company is now focusing on expanding its activities here, especially aiming at the northern and eastern areas of the island.

It has already commissioned its own fresh milk chilling centres in Kilinochchi, Oddusudan and will soon open one in Jaffna as well.

“We have heavily invested in setting up local fresh milk collection centres in the north and eastern areas. This is mainly due to the fact that our products are made based on fresh milk and if we cannot have the correct supplies for our production process, then we have to import milk. On the other hand, our thinking goes in line with the Government’s initiative of making the country self-sufficient in fresh milk and we want to support that cause,” Holfbauer pointed out.

Commenting on the development of diary faming, especially in the north and east areas, the Managing Director said that the first step in setting up proper dairy farming in the north and east was to provide farmers with proper training.

“This is the most important way of developing the dairy farming industry in these areas. Because of the long term conflict that raged in these areas, the farmers did not have any opportunity to work with cows. They are used to getting milk with zero input – cows were allowed to go around feeding and in the evening farmers used to milk them. With that method, you would end of getting only one or two litres of milk from a cow, which is not the way forward in dairy farming. Furthermore, there should be quality feed for cows,” he explained.

According to Nestlé, the C03 grass type which can be easily grown in Sri Lanka is best suited for cows. “The third point is that the quality of Sri Lankan milk cows is not the best. What you need to do is alleviate the quality of the cows by means of artificial insemination. The Government is aware of this process and there should be a joint effort in finding solution for these areas,” Holfbauer noted.

Milk is the highest sourced of Nestlé products. “We also produce coconut milk powder, which is less used is Sri Lanka but heavily used by 40 other countries in the world and we are the biggest buyer of coconuts for industrial use,” Holfbauer revealed.