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Nestle expects good growth from Asean this year

SINGAPORE, June 14 – Food and beverage giant Nestle S.A. expects good growth in all Asean countries this year despite the current economic uncertainty, Frits Van Dijk, its executive vice president and zone director for Asia, Oceania, Africa and Middle East said today.

He said this was evident by the increase in investment of 260 million swiss francs (1 swiss franc = RM3.2494) for the Asean operations from last year, while total investment over the last three years amounted to 550 million swiss francs.

In 2008, Nestle’s business in the region saw a 15 per cent organic growth, with sales of around five billion swiss francs, he told a media briefing following the end of the South East Asia tour by Nestle chief executive officer Paul Bulcke, here.

Asked if the group would cut back on investments if the economic outlook did not improve as being predicted by some, he said: “Then, there might be a slowdown in investments”.

However, he was positive that the economy would bounce back, and added that Asia was not badly hit by the current crisis as it had learnt not to fall into the same trap following the 1998 meltdown.

Meanwhile, Bulcke said the group was well-positioned to further grow its brands among Asean consumers, who are already changing their spending behaviour.

“We see them trading down (spending less and buying in smaller quantities). They don’t have to trade out of our brands. We need to adapt our portfolio to their needs,” he said.

Nestle’s products are divided into the premium, mainstream and popularly positioned products (PPP) categories.

He said Nestle’s growth driver therefore would be to concentrate on delivering nutrition, health and wellness to consumers, focus on the emerging consumers for the PPP and also reposition the premium products.

“How do you empathise with the consumers in this crisis? It’s by how we make a difference to consumers. That is how I want to see Nestle do its business,” he added.

Asked as to the impact of rising commodity prices on Nestle, Bulcke said the group was trying to price its products according to the respective markets and hope that prices would stabilise.

“We have to ensure that we are cost-competitive. But at the same time, we have to be fair to the farmers, too,” he said.

Asked about hedging, he said: “We don’t want to make money through hedging. It is only used to reduce volatility”.

At the same event, Nestle (Malaysia) Bhd managing director, Sullivan O’Carroll said Malaysia was a leading exporter of the group’s halal products, accounting for more than 20 per cent of its total turnover in the country.

“The export market for halal products from Malaysia is growing faster than our local market itself,” he said, adding it was a good opportunity to tap Muslim consumers in other markets such as China, the Middle East and Europe.

“The obvious opportunity is in halal products. We are also helping some of the local small and medium enterprises in Malaysia to be better with their halal accreditation and to position themselves,” he said. – Bernama

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