Nestlé Increases Local Sourcing In South Africa With New Processing Plant

By: Trademagazin editor Date: 2023. 07. 20. 09:32

Swiss food company Nestlé said it will be locally sourcing over 40% of raw materials for a new processing plant in South Africa to offset supply chain challenges and cut costs.

Nestlé opened a processing unit for its coffee brand Nescafe on Tuesday, at its factory in Hammanskraal near the capital, Pretoria, as it moves to tap into an increasing demand for coffee consumption in South Africa.

Nestlé had said last month that it was ramping up local raw material sourcing in Nigeria and other African countries to reduce foreign exchange exposure.

Power Cuts

Food producers in South Africa have been hit by a combination of long hours of power cuts forcing them to run expensive diesel generators and a massive slump in domestic currency making imports dearer.

Both issues are making the impact of higher food price inflation worse.

The company’s communications executive Mota Mota said the plant would aim to reach 90% local sourcing in “the immediate near future.”

Local sourcing

Nestlé, which runs five factories in South Africa, already produces Cremora coffee creamer and Maggi instant noodles, with the raw materials for both are heavily sourced locally.

Its localisation efforts would also help to reduce environmental impact caused by imports, create employment and cut down on time to reach consumers, the company said.

ESM