Wednesday, November 3, 2010

Nestlé (Malaysia) Bhd

Headquartered in Switzerland, Nestlé is the world’s leading and trusted food, nutrition, health and wellness company with a presence in over 100 countries. It operates 456 factories in over 80 countries. In Malaysia, Nestlé was established in 1912 and currently manufactures, imports, exports and distributes a wide range of halal products.

In the following email interview, group managing director Peter Vogt shares his views on the company’s business, strategies and growth outlook. Vogt has over 25 years of management experience with Nestlé. Since September 2009, he has been the managing director of Nestlé Malaysia and region head for Nestlé Malaysia/Singapore.


What are the group’s competitive strengths and advantages?

Nestlé (Malaysia) Bhd produces over 300 halal products in categories such as coffee and beverages, prepared foods, milks, liquid drinks, breakfast cereals, chilled dairy, ice cream, chocolate and confectionery. Brand names under the Nestlé umbrella include Milo, Nescafe, Maggi, Nespray, Kit Kat, Nestiva, Nestum, Bliss, Nutren, Cerelac, Power Bar, and many more.

In Malaysia, Nestlé exports its products to more than 50 countries worldwide.

Guided by the Nestlé Business Principles, we have built our business on the fundamental principle that to have long-term success for our shareholders, we have to ensure that all our activities are sustainable and, additionally, create significant value to the society.

Meeting consumers’ needs and demands is vital to our business. At Nestlé, we continuously innovate and renovate our products to ensure that we offer tastier and more nutritious products than our competitors.

We are committed to increasing the nutritional value of our products while improving the taste and we have achieved this with initiatives such as “Nutritional Compass” and “60/40+”.


What have been the achievements of the group in the past four years?

From a financial performance perspective, the group has performed very well, growing the top line at a faster pace than the country’s yearly GDP’s growth and improving profit margins year after year.

We have driven our financial performance by leveraging our strong brands, our nutritious and healthy products, our manufacturing capabilities and our people.

We have captured the benefits of scale enabled by Nestlé’s Global Business Excellence programme (Globe ) by being the first Nestlé market to implement this programme in the Asia-Pacific and by recently taking advantage of a regional Nestle shared services organisation in the Philippines.

We have embraced Nestlé Continuous Excellence (NCE) principles at the factories and head office which have allowed us to capture significant efficiencies and eliminate waste throughout the organisation while continuing to simplify our business.

Our overall performance is reflected in our income statement with growth in sales, profit margins and earnings per share, as well as a strong balance sheet and cash flow, with a notable improvement in our trade net working capital, which saw a 30% reduction over three years.


What has been the group’s strategy for expansion? How have these strategies turned out?

At Nestlé, any business and investment decision is always taken with a long-term objective in mind.

In the last three years, we have already spent more than half a billion ringgit mostly in manufacturing lines for new products, capacity increase and technical skills for halal manufacturing.

These investments are focused on domestic consumption and exports. With Nestle Malaysia being the halal hub for Nestle, our export business has become close to a quarter of our revenues.

This year, the group will continue this investment strategy by setting aside an amount of RM140 million for capital investment.


How is the group positioning itself within your industry?

Nestlé is the “Good Food, Good Life” company.

Nestlé has positioned itself as a global, trusted and responsible food, nutrition, health and wellness company to be more proactive in providing healthy solutions and value-added products to meet the needs of consumers.

The positioning towards becoming a food, nutrition, health and wellness company is a worldwide effort for Nestlé reflecting the changing needs and lifestyles of today’s consumers.

Through investments in research and development, we want to contribute towards improving the quality of lives of consumers by continuously improving taste and nutrition for the well-being of consumers. “Good Food, Good Life” captures the very essence of Nestlé.


What are the group’s plans for the future, both short term and long term? What are your group’s plans to compete in the increasingly globalised environment?

Globally, Nestlé will continue to invest in research and development, innovate further and renovate existing products to ensure they are more nutritious and healthier by reducing salt, sugar, and fat while maintaining excellent taste.

At Nestlé, any business and investment decision is always taken with a long-term objective in mind and we will continue to make investments that are based on market demands


Where would you like to see the group in 10 years’ time?

The key pillars of our core business strategy remain steadfast — we will continue and will stay focused on the journey to become a nutrition, health and wellness company by continuing to innovate and renovate our products, improve operational efficiency, provide good and responsible communication to our consumers and ensure product availability.

With the world economy expected to improve, we foresee the Malaysian economy benefitting from the higher global demand for its products. With the increasing demand for halal products from other markets such as Europe, we will continue to make the necessary investments to meet market demand.

This article appeared in The Edge Financial Daily, November 2, 2010.

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