Nestle invests big for new chances in food market

Nestle Health Sciences, a subsidiary of Nestle SA, together with Galderma, Nestle Skin Health's medical solution unit, invested more than one billion yuan ($158 million) on Tuesday in their two new factories in Taizhou of East China's Jiangsu province.

The move is planned to help Nestle better reach Chinese consumers, by meeting their demands in the areas of special medical purposes and skin care products.

It adds to the firm's existing industrial setup and underscores Nestle's confidence in the future prospects of the Chinese market, according to Nestle. Currently, Nestle has 33 factories and nearly 50,000 employees in China.

According to Liu Xuecong, secretary-general of the China Nutritional and Health Food Association, the development of the market of foods for special medical purposes is still at its initial stage, but the demand is huge.

"The foods for special medical purposes industry is expected to become the new blue ocean for China's health industry." Liu said. "The Nestle Taizhou factories will be established to be a scientifically and technologically advanced factories, and will play an important role in supporting the healthy development of China's foods for special medical purposes industry."

Magdi Batato, executive vice president and head of operations for Nestle SA, added that, "China is a very dynamic and exciting market which Nestle is optimistic about."

By bringing the manufacturing capabilities of Nestle Health Science and Nestle Skin Health to China, he said Nestle is in a stronger position to enhance the company's product offering and cater to consumer expectations for a good life.

The two factories, covering a land area of 13 hectares, are supported by shared facilities and high-techs to ensure high standards from quality assurance to manufacturing efficiency.

Batato also indicated that the move doesn't mean the firm has been entirely shifted to the medical, nutrition and health sectors.

"Food still takes up 95 percent of our product portfolio and is a crucial part of our business," Batato said, noting the company's emphasis on product innovation.