New Delhi: Nestle India, one of the largest fast-moving consumer goods (FMCG) companies in India, is planning to establish a new factory to cater to the increasing demand for its products. The company is currently searching for the ideal location for its tenth factory, which is expected to help accelerate its core business and capitalize on new growth opportunities.
According to Suresh Narayanan, Chairman and Managing Director of Nestle India, the company is considering several locations, with a preference for eastern India, where it does not have any production units. “One of the areas that we do not have a representation of a factory is in the east. So, clearly, if you are able to get a good geography and locational fit, we would like to look at the east, but at the moment, there are others in the valuation,” he said.
Nestle India had previously announced its plans to invest Rs 5,000 crore in the country by 2025 to expand its operations and capacity. The company is currently expanding its capacity at its latest plant in Sanand, with construction of the second phase already underway and approval granted for the third phase. It is also increasing the capacity of its other plants. “About one-third of the investment that we have envisaged, about Rs 1,500 to 2,700 crore, will get executed in the next year or two, and the rest of that subsequently,” Narayanan added.
The FMCG sector in India is highly competitive, with the recent entry of Reliance Retail, led by billionaire Mukesh Ambani, creating new challenges for established players such as Nestle India. However, Narayanan remains optimistic, stating that he is a “great respecter of competition” and that Nestle India has the “wherewithal” and “ecosystem” to deal with the challenges. He believes that the Indian consumer chooses products based on value rather than just price and that Nestle India’s brand strength lies in quality, efficacy, and nutrition.
In conclusion, Nestle India’s plans to establish a new factory in eastern India demonstrate the company’s commitment to expanding its operations and catering to the growing demand for its products. Despite the challenges posed by new competitors, the company remains confident in its brand strength and ability to maintain its position as one of the leading FMCG players in India.
