Nestlé’s New Landmark

The new landmark factory in Vietnam represents Nestlé’s commitment to the Vietnamese market as part of the Nescafé Plan, a global project worth 500 million Swiss franc, or US$520 million, to develop sustainably the coffee industry worldwide.
Nestlé’s New Landmark
Inside the factory where production line of Nescafé is, all the machinery and equipment are running. Just like cascade, coffee beans are being continuously transported on conveyors to the roasting section. Surprisingly, the entire process—but a few exceptions—are fully automatic from start to finish. Furthermore, the coffee residue is not simply waste to be dumped: it is instead used as fuel for the production line.
The above description comes from the new coffee factory of Nestlé which came on stream last week. Christened Nestlé Tri An, the factory—grossing total investment capital of 230 million Swiss franc, or US$238 million—is located in Amata Industrial Park, Bien Hoa City, Dong Nai Province. Nestlé Tri An is designed to consume between 40,000 and 50,000 tons of coffee beans a year with products satisfying both local and export markets’ demand. Opening its representative office in Vietnam in 1995, Nestlé now has under its umbrella five factories operated by 2,000 staff members. In proportion with its personnel growth, Nestlé’s investment capital has soared from US$25 million to some US$450 million.
Above all, the new landmark factory represents Nestlé’s commitment to the Vietnamese market as part of the Nescafé Plan, a global project worth 500 million Swiss franc, or US$520 million, to develop sustainably the coffee industry worldwide.
According to Rashid Aleem Qureshi, Nestlé Vietnam managing director, the Nescafé Plan has been implemented in Vietnam since 2011 to help optimize the coffee supply chain and provide cultivation techniques for farmers. In 2012, coming under this plan were approximately 20,000 farmers. This year, the same number of farmers will be subject to the plan. The participants will receive some two million young coffee trees.
Within the framework of a public private partnership plan, Nestlé is working closely with the Ministry of Agriculture and Rural Development in a bid to raise the efficiency of the coffee tree via the application of better cultivation techniques. The plan’s ultimate goal is to turn Vietnamese Robusta coffee into the world’s benchmark. The project will enable farmers to save a considerable amount of water as well as some 15% of the fertilizers to be used while complying with Nestlé standards.
More importantly, the ample coffee supply will provide not only Nestlé Tri An with coffee beans but also the group’s other factories in more than 20 countries worldwide, including Germany and Japan. In other words, Nestlé has embarked on the path to introducing Vietnamese coffee to the rest of the world, even to the most meticulous markets.
Nestlé’s new factory in Vietnam—as Wayne England, Nestlé Indochina chairman and CEO, has put it—serves as a bridge linking the group to regional demand by providing Nescafé branded products suiting consumers’ tastes. That means the new factory is tasked with producing both existing and new products.
In a coffee-exporting nation such as Vietnam, Nestlé has reaped success. The secret of success, says Qureshi, lies with a combination of technologies and an international trademark, as well as the product localization process. “Our business is in the beverage industry which must be localized,” says Qureshi. “We have conducted research on local tastes for each of our products to manufacture the best-suited ones. This is key to Nestlé’s success worldwide, on both the regional scale and the national level, such as in Vietnam.”
According to independent market research companies, Nestlé is leading in Vietnam’s instant coffee industry. In a coffee producing country, where the coffee industry has posted a two-digit growth rate, this is an impressive achievement.
Yet Nestlé has plenty of work to do, Qureshi says, as Vietnam’s coffee consumption is only a quarter of Thailand’s. The market potential remains enormous and thus allows Nestlé to realize its business expansion plans. In this competition, Qureshi stresses, the winners will be those offering the best products.