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Nestlé to help grow cassava industry

Swiss food and beverage giant Nestlé and its Philippine subsidiary has helped coffee growers as part of its Nescafe “shared value” creation efforts. With its P2-billion Milo malt plant now rising at its Batangas facility, it will do the same thing with the country’s cassava farmers.

Milo Malt Plant's Architectural perspective.

Milo Malt Plant’s Architectural perspective.

Cassava, along with barley, is the raw material for protomalt extract, the key ingredient in Milo.

Nestle Philippines chairman and CEO Jacques Reber in a recent press briefing revealed plans of actively looking at using cassava sourced from local farmers to create shared value. It’s a “move that is expected to help improve livelihood, further boost agriculture, and uplift the cassava industry” in the country.

REBER

REBER

Reber said the company has already began the prequalifying process of cassava farmers in Mindanao and that he “hopes that more farmers will take up cassava planting to supply Nestle’s requirements in the long term.”

While shared value creation is being developed, the protomalt plant once operational next year (October, 2017) will initially import cassava from Thailand.

Nestle expects the plant’s capacity to increase in three to four years with exporting potential to other Nestlé companies abroad. Initial workforce will be lean, only 23 operators and technicians.

Besides the advanced technology which the company will bring to its new plant, the facility will also be environment-friendly with natural lighting and ventilation, low water consumption and minimal water loss. Solar panels will also be used as energy source.

Reber said the MILO malt plant which started construction last December will have a start-up production capacity of 35,000 tons.

The protomalt produced locally will be consumed by the domestic market mainly but would ship it to other markets when there are export opportunities going forward.

“The 35,000 ton capacity will satisfy our needs (in the Philippines) and later we will look at global (requirements),” said Reber.

The Philippines is Nestlé Group’s second largest market for MILO after Malaysia and Nigeria. It currently sources its MILO malt from its Singapore plant.

In terms of whole Nestlé market, the Philippines is second biggest after China, and the eighth in the world. Last year, the company reported sales of P121 billion, up from P116 billion in 2014.

“The Philippines is an important market (and the) P2-billion investment is a clear demonstration that we believe in the potential of the Filipino market, of the Philippines and Nestlé Philippines,” said Reber. “And we continue to invest in a big way.”

In just five years or since 2011, Nestle Philippines has poured investments amounting to P14 billion. According to Reber, their investments will significantly increase in the next five years as they increase production capacity, upgrades facilities and imports new technologies.