Nestle to stay put

sustain its rapid growth. Officially, the Ministry of Finance has projected the economy to grow by 9,4 percent this year.
Nestle Group’s pledge comes amid reports that Nestle Zimbabwe last year surpassed DRC in terms of revenue performance while also doing well on profitability.
But the company said that (primary) listing rules in Switzerland did not allow them to disclose details on the actual revenue and profit figures.
The local operations’ revenue performance now ranks second after Angola. Mozambique, Zambia and Mauritius come third, fourth and fifth respectively.
They form part of the 22 operations Nestle Group owns in Africa.
The head of Nestle Equatorial Africa Region, under which Nestle Zimbabwe falls, Mr Pierre Trouilhat, said in an interview that  Zimbabwe remained  an attractive investment destination for the group.
He said the infant food and cereals manufacturer had stuck by its investment in the country in the midst of crippling economic constraints.
He said the position was not about to change as demonstrated by the group’s continued investment.
It had budgeted US$26 million for recapitalisation, rebuilding and development of its dairy sector.
Mr Trouilhat was speaking during the tour of India to familiarise himself with the group’s operations in its bigger markets.
India is the world’s fourth biggest economy after the USA, China and Japan and is the world’s second most populous country after China with 1,3 billion people.
“Zimbabwe is very important to us,” said Mr Trouilhat. “Nestle continued and kept its operations during difficult times.
“The business has been doing well in terms of growth and has been improving on profitability. It is quite satisfactory. It has been very successful.”
Nestle’s reassurance comes as the group keeps its fingers crossed, hoping the indigenisation and empowerment plan submitted to Government would be approved.
While Nestle Zimbabwe faced challenges encountered by most firms in the decade to 2008, the following year witnessed a complete turn of fortunes.
Mr Trouilhat said milk was an important input for its manufacturing processes and the company would strive to meet the indigenisation requirements by empowering farmers.
Foreign-owned firms are compelled, in terms of the Indigenisation and Economic Empowerment Act, to hold a maximum of 49 percent shareholding in local firms.
Nestle Zimbabwe was allocated US$14 million for procurement of heifers to be distributed to farmers, with emphasis on smallholder farmers and women.
It would borrow extensively from the Indian model where 80 percent of milk supplies come from small farmers.
Presently, Nestle Zimbabwe receives most of its milk supplies from large commercial farmers. But the focus will now spread to the development of smallholder farmers.
Like India, the local unit would build smallholder farmers around big successful dairy farmers and also establish milk collection agents.
Nestle India has been training small women dairy farmers with technical expertise and they supply most of the 1,6 million litres of milk it collects daily.
This is part of the group’s objective of ensuring it creates shared value within the communities in which it operates.
The shared value initiatives, as in India, will involve programmes for awareness on nutrition values, ensuring clean and safe drinking water, water conservation and HIV and Aids awareness initiatives.