KUALA LUMPUR: Nestle (M) Bhd will see an increase of 75 per cent in manufacturing capacity for its ready-to-drink segment when the company’s Sri Muda factory is completed in 2014 fourth quarter.
Its Finance and Control executive director Marc Seiler said the Sri Muda facility, construction for which started in 2013, is planned to start operations by 2014 fourth quarter.
“The majority of the RM280 million capital expenditure (capex) for 2014 announced earlier will be invested for the completion of the Sri Muda factory,” Seiler told reporters at the annual general meeting press conference here yesterday.
“This investment is spread throughout 2013 and the majority of our 2014 capex because it is a fast growing category which has a lot of future for us,” he said, adding that investments will also be allocated for its noodle and confectionery businesses.
“On top of that there are numerous other investments which are not as sizeable, but typically as a relatively large company, we have rationalisation and improvements of capacity which is also encompassed in that capex,” Seiler said.
For the financial year ended Dec 31, 2013, Nestle Malaysia registered a turnover of RM4.8 billion, 5.1 per cent higher than the corresponding period last year, on the back of strong growth in domestic sales spurred by strategic investments in marketing and promotional activities.
The strong growth in domestic sales mitigated the lower export volumes during the year, which was due to softening demand from affiliated companies amidst the challenging global economic environment, he said.
On outlook, Seiler said there are positive signs of growth, albeit at a moderate pace, which provides ground for optimism about growth opportunities for the Asian economies including Malaysia.
“For the group, we intend to fully leverage on the positive developments for both our local and export businesses.
“The group will remain focused on growing both the top and bottom lines while continuing its long-term strategy of investing in manufacturing capacity to support growth,” Seiler said.
He added the group will also continue to intensify its marketing investments in line with Nestle’s objective of being the leader in nutrition, health and wellness, as well as the industry benchmark for its financial performance and trusted by all stakeholders. — Bernama