Nestle will partner with Myanmar Distribution Group (MDG) to distribute its made-in-Myanmar products by the end of 2016, according to company officials.
The Swiss giant plans to start working on its factory in Dagon Seikkan Industrial Zone within two months, pending approval of the venture by the Myanmar Investment Commission, said U Aung Maw Thein, MDG managing director.
Nestlé will initially make its 3-in-1 coffee products at the factory, though has plans to later move into other areas like dairy, ice cream and chocolate, said Suphavat Khamijoun, coffee brand manager for Nestlé Myanmar Ltd.
While the initial phase will see an investment of about $25 million to produce coffee, “the amount for the second phase will be much bigger as investment is not ending with Nescafé [coffee products],” he said during a company press event on September 19 in Yangon.
Nestlé products are a common sight in Myanmar, though are presently imported from Thailand.
Nestlé Myanmar country manager David Pettinari said investment will total about $50 million over the next five or six years. The firm will try to source locally, but much of its raw products will be imported for the time being.
“At the moment there are very very limited raw materials we can buy from Myanmar,” he said. Mr Pettinari added the firm will work with local businesses such as dairy farmers to get their production to acceptable levels of quantity and quality.
U Aung Maw Thein said that coffee seeds currently being tested in Bago Region near Taungoo may have the quality Nestlé needs for its products.
Nestle will own the majority share of the joint venture, while MDG will be in the minority – though the exact size of the stakes has not been decided.
“We will try to distribute our products within 18 months – we will start operating the factory at the end of 2016,” said Mr Pettinari. He added Nestlé is committed to Myanmar, and is keen to partner with MDG and its extensive distribution network.
Source: MYANMAR TIMES