Nestle ups Egypt investment in emerging market push

Nestle, the world's biggest food group, will invest about 1 billion Egyptian pounds in Egypt over the next three years in a push to shift its focus to emerging markets, an executive said.

The maker of KitKat chocolate bars and Maggi soups wants at least 40 to 45 percent of its business to come from markets like Brazil, China, Ghana and Vietnam within 10 years, up from about 30 percent now, Executive Vice President Frits van Dijk said.

"In 2009, we saw double-digit organic growth (in emerging market top line), and this trend will continue. In emerging markets we will have strong growth," said van Dijk, who is also zone director for Asia, Oceania, Africa and the Middle East.

Nestle is planning to invest US$1 billion in Africa over the next two years and open six new factories on the continent by 2012, including one in Algeria and another in the Democratic Republic of Congo.

One factory is planned to open in Mozambique to take advantage of a Chinese-built railroad linking the country's coast to Zambia, van Dijk said.

"We are seeing time and again where infrastructure starts to develop, that's where the hinterland is being opened up and you see a lot of trading, and therefore disposable income becomes available," he said.

He said Nestle sales were flourishing in countries including Vietnam, Indonesia, Chile, Columbia and Mexico, alongside Brazil, India and China.

Nestle will invest 450 million pounds in Egypt this year and another 500 million pounds over the following two years, compared with about 1 billion pounds over the last decade, van Dijk said.

Nestle competes with local firms like Juhayna and Ajwa Food Industries in Egypt, as well as international companies such as Danone.

Nestle closed its Tunisian ice cream and cereal factory for about a week because of rioting in the country, but reopened it again on Tuesday morning, van Dijk added.

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