Nestlé's new Brazilian beverage factory reflects dairy demand

By Ben Bouckley

- Last updated on GMT

©Marie Hippenmeyer/Nestlé.
©Marie Hippenmeyer/Nestlé.

Related tags Milk

Nestlé has opened a new CHF 83m (€67m) beverage factory in Brazil to cater for increased demand for dairy-based and other beverages in the state of Rio de Janeiro.

The company said its new site (pictured) will have a total annual production capacity of 124,000 tonnes, and will initially produce UHT milk under the Ninho and Molico brands, and soy-based Sollys branded products.

Nestlé said the factory (the firm’s 31st in the country) would begin to manufacture ready-to-drink (RTD) chocolate milk in 200ml and 1l formats under the Nescau brand in 2012.

Next year will also see production lines installed for Nestlé Fast (an RTD product sold under the Nescau, Neston, Molico and Alpino brands). The company said its new site would create more than 1,000 direct and indirect jobs.

More efficient supply

Ivan Zurita, CEO of Nestlé Brazil said: “The state of Rio de Janeiro is of increasing importance for us. This factory will allow us to supply the market in Rio de Janeiro and the states of south east Brazil even more efficiently.”

The Três Rios site will service the company’s markets in Rio de Janeiro and the states of Minas Gerais, Espírito Santo and São Paulo.

Nestlé’s existing factories in the state of Rio de Janeiro are an ice cream factory in Jacarepaguá and a water bottling factory in Petrópolis.

400 local farms will supply the factory with around 200,000 litres of milk a day, and Zurita said Nestlé said it wanted to “foster and strengthen the milk production potential”​ of Rio de Janeiro.

“This will increase farms’ competitiveness and profitability, leading to a better quality of life in these rural regions,”​ he added.

Strong regional growth

Nestlé is a major milk buyer in Brazil, purchasing 2.2bn litres in 2010. Its supply network includes more than 40,000 direct and indirect milk producers.

During a recent conference call with investors and analyst to discuss Nestlé’s performance for the first 9 months of 2011, head of investor relations, Roddy Child-Villiers said that Nestlé was seeing organic growth of 10 per cent within Latin America, with dairy the biggest regional category for the firm.

“The biggest category in the region is dairy, which is growing high single digit. Amongst brands I would highlight the rollout of Nestlé Ninho liquid milk with probiotics, Nescau powdered beverages in Brazil, Nestea and Nescafe Mexico and Maggi in Venezuala,” ​he said.

Asked why dairy-based beverages were performing well in Brazil, a Nestlé spokesman told that, "with nutritional differences in comparison to regular milk",​ company products such as Ninho Fortified (enriched with iron and vitamins A, C and D) and Molico Total Cálcio (added calcium and Vitamin D), had consolidated the firm's position as a market leader in nutrition, health and wellness.

"With the new plant in the city of Três Rios, the company will increase the production of milk and other drinks and will strengthen milk production in the region,"​ he added.

In terms of investments worldwide, Child-Villiers said Nestlé was pushing through new projects “as planned, and as quickly as we can manage the capital process in terms of building facilities”.

Related topics Markets Dairy Drinks Emerging Markets

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