Nestlé announces new $43m Philippines plant to produce Milo ingredient

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Southeast asia, Philippines

Nestlé’s Philippines operation is investing PHP2bn (US$43m) in a new plant south of Manila to manufacture a key ingredient for its popular Milo fortified chocolate drink. 

Opening in late 2017, it will be the smallest of only four Nestlé sites that process “Protomalt​”, which is formed from carbohydrates extracted from cassava and barley.

The factory will be built in Batangas, alongside an existing plant which produces a range of powdered milk and coffee products. The Swiss consumer food and beverage giant operates four other facilities in the Philippines.

The Philippines is an increasingly robust market for Nestlé, which has invested nearly US$300m over the last five years to expand its production capacity in its eighth-biggest market.

With nearly US$2.6bn in sales last year, the country is second only to China in Asia, with Milo a “significant contributor​” to its regional revenue, said Jacques Reber, chief executive of Nestlé Philippines. 

The Philippines is an important market [and this] PHP2bn investment is a clear demonstration that we believe in the potential of the Filipino market, of the Philippines and Nestlé Philippines​,” said Reber, adding that the company intends to “continue to invest in a big way​.”

With a claimed market penetration of over 90%, the Philippines is also the second-biggest market for Milo after Malaysia. Developed in Australia eight decades ago, the drink is extremely popular in Southeast Asia, where it is marketed as a functional drink. 

According to Nestlé, Protomalt and the other active ingredient in Milo drinks, Actigen-E, help to “energise the body and mind​”.

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