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Nestlé to invest R500m in SA, add two factories to local portfolio

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Speaking at a sod turning event in Babelegi, where the company plans to construct the cereal and noodles factories, MD Sullivan O’Carroll said that the company had great confidence in the area’s workforce and hoped that its commitment would draw other investors’ interest into Babelegi, where it has been operating a Cremora factory since 1979.

The region, which was fashioned as an industrial node during apartheid, has experienced exodus of investors since the advent of democracy.

“Babelegi had previously been a thriving, economic hub, and this municipality would like to see the area return to its former glory,” said Tshwane mayor Kgosientsho Ramokgopa.

The mayor said that the City of Tshwane was currently looking at its policies and considering ways to streamline and quicken processes for investors wishing to do business with the city. Considerations included reducing approval times for new investments, which have taken up to 18 months in the past, to a 34 days, and mobilising project finance for the provision of bulk services.

Economic Development Deputy Minister Enoch Godongwana described Nestlé’s investment into the area as being in line with government’s plan to create five-million additional jobs by 2020.

O’Carrol said that the construction of the 1 600m2 Milo and Cheerio cereals factory would start immediately and would be completed by mid-2012. Previously, these cereals were imported into South Africa from countries such as France, Chile and the Philippines. However, the company noted that it had acquired about 10% of the cereals market share since its launch two years ago, which had been its most successful campaign ever.

Further, Nestlé anticipated that the other factory, which would produce Maggi products, would be completed within the next year.

The company also announced its recent acquisition and upgrade of its Potchefstroom based Specialised Protein Products, which would increase the company’s production capacity of nondairy creamers and provide it with an opportunity to develop soya based products.

These investments would see the creation of 350 new jobs.

In addition, O’Carrol pointed out that Nestlé would source all its raw materials, such as maize and grains, from South Africa’s agricultural businesses.

Swiss ambassador to South Africa Rudolf Baerfuss, who attend the announcement, described Nestlé as a flagship company of Switzerland, noting that it employed 300 000 people across the globe and contributed to 20% of Switzerland’s gross domestic product.