JAKARTA—SWISS-BASED NESTLÉ, the world’s biggest food group, is planning to relocate factories in Malaysia and the Philippines to Indonesia to be closer to raw materials, officials told a local newspaper on Monday.
Brata T. Hardjosubroto, spokesperson for Nestlé’s Indonesia unit, told daily business newspaper Kontan that the firm would announce details of the relocation in November.
But according to officials of Nestlé Philippines Inc. the company will stay on in the country and has no plans to move any of its factories to Indonesia, contradicting the report that appeared in the Indonesian newspaper.
In an official statement sent to the Philippine media yesterday, Nestlé further clarified that the company, in fact, would continue to invest heavily in its manufacturing facilities in the Philippines to upgrade machinery and expand capacities to meet local and foreign demand for its products.
The company currently has four manufacturing facilities in the country. Its Cagayan de Oro factory, where the company manufactures Nescafé, also serves as the Nestlé Group’s Asean Supply Center for filled milk powder.
Nestlé also has six factories in Malaysia including one making one of its key beverage brands Milo, the Jakarta newspaper said.
Indonesian Deputy Trade Minister Mahendra Siregar told the paper Nestlé’s factory relocation was based on its need to be close to raw material sources.
Nestlé is in negotiations with Indonesian cocoa powder producer PT Bumitangerang Mesindotama to supply cocoa for the relocated factories, said Bumitangerang Mesindotama’s president director Piter Jasman.
Indonesia, Southeast Asia’s largest economy, is attracting investor interest for its economic resilience during the financial crisis, improved political stability and abundance of natural resources.
The world’s largest listed palm oil firm Wilmar is planning to invest $2 billion, including possibly in sugar plantations in a planned giant food estate in the Papua region, the head of the country’s investment board said on Monday.
But the country has lagged neighbors in attracting foreign direct investment because of worries over regulatory uncertainty, rampant graft and inadequate infrastructure.