Nestle To Invest $250 Million To Transform And Enhance Business In Sao Paulo

Nestle Brazil
Nestle CEO Schneider attends the 152nd Annual General Meeting of Nestle in Lausanne (Photo: Reuters / Denis Balibouse)

Swiss food and drink giant Nestle revealed on Wednesday its plans of heavily investing in Brazil's Sao Paulo state to expand its business in the region. Nestle elaborated that it is prepared to invest around $250 million over the next three years.

The investment in Sao Paulo will be used to enhance the company's production capacity in the region, including introducing new technologies and upgrading current systems. Nestle also mentioned that it intends to conduct a "digital transformation" of its business in Sao Paulo.

According to Nestle Brasil's chief executive, Marcelo Melchior, Sao Paulo is a particularly important location for the company given that it had hosted its first factory in Brazil. The company apparently has huge investments in the region including an estimated $500 million in investments from its Brazilian subsidiaries.

Nestle currently has around 12,000 people directly employed in Brazil. However, the company mentioned that it has more than 100,000 people indirectly employed in Sao Paulo city.

The world's largest food product manufacturer revealed that it plans to increase its natural and organic products in Brazil. The strategy is meant to place the country in line with other parts of the world, which have shifted to more natural and healthier options.

A Nestle spokesman explained that cutting sugar, sodium, and saturated far from the company's product line will require a lot of resources to achieve.  Nestle Brasil's head of marketing and communications, Frank Pflaumer, stated that the company has been working hard to shift its products to align with the global consumer appetite for healthier options.

Since 2014, the company is estimated to have cut around 14,000 metric tons of sugar, 5,000 tons of saturated fats, and 300 metric tons of sodium from its manufacturing process. Last year, the company had established its first quality assurance lab in Brazil. This was then followed by the launch of Nestle's first line of organic products in the region.

Nestle did not immediately confirm whether it would be using some of its planned investments to acquire local players. Outside of Brazil, Nestle has already made a number of major acquisitions. Last year, Nestle bought a majority stake in an Ecuadorian food company called Terrafertil; a company that specialized in selling organic plant-based food items.

Apart from Nestle, local reports have revealed that another foreign company may also be eyeing to invest heavily in Brazil's financial center. Earlier in the month, Sao Paulo Governor João Dória announced after his trip to China that Huawei Technologies was planning on investing up to $800 million to build its second manufacturing facility within the Brazilian city.

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