Nestle not increasing product prices for now — chairman

KUALA LUMPUR: Nestle (Malaysia) Bhd is not increasing its product prices for now although commodity and raw material prices are expected to rise this year due to the weaker ringgit.

“Nestle has not increased its product prices since last year. If possible, we will maintain the current prices,” Chairman Tan Sri Syed Anwar Jamalullail told a press conference after the company’s annual general meeting here, yesterday.

Syed Anwar was asked if the company planned to increase its product prices as commodity and raw materials prices were expected to rise this year from the impact of the ringgit fall.

Meanwhile, Managing Director Alois Hofbauer said the prices of raw and packaging materials and ringgit value were the two key factors that would affect the company’s input cost, which would subsequently impact on product prices.

“We will try to hold it (the prices) as long as we can, and try to give consumers the best value for money as Malaysian consumers are currently under pressure on price increases all around,” he said.

In another development, Hofbauer said the company would allocate about RM130 million for capital expenditure this year, mainly for capacity extension, product innovation, as well as modernisation, upgrading technology and automisation for its plants in Kuching and Batu Tiga, Shah Alam.

To-date, the company has eight plants in Malaysia.

“We have invested about RM600 million (RM200 million in 2015) in the last two years and RM1.5 billion over the past seven years to build our manufacturing and distribution facilities, he said.

The company hoped to gain a higher market share this year from 15.8 per cent registered last year, up from 14.5 per cent in 2014, he added.

On exports segment, he said exports rose 12 per cent in the first quarter ended March 31, 2016, mainly driven by the increasing demand from the Philippines and Indonesia.

“We hope the momentum will continue and demand from the 50 affiliated companies around the world will remain strong,” he said, adding exports contributed 20 per cent to the company’s business last year. — Bernama