Nestle keeping coffee business

Nestle Philippines Inc. said it is keeping its coffee manufacturing operations in the country, backtracking on its earlier statement that it may consider transferring such to other countries due to high costs.

“Nestlé Philippines is not planning to close any of its manufacturing facilities in the Philippines. Coffee under our Nescafe brand remains to be a core pillar for us, and we are committed to support the local coffee industry and our coffee farmers to growth,” the food and beverage firm said.

The company, which has been operating in the Philippines for 107 years, said it is committed to doing business in the Philippines for the next 100 years.

“Nestlé is here to stay,” it added.

Earlier, Ernesto Mascenon, senior vice president and head of corporate affairs at Nestle Philippines, said it may opt to move its coffee manufacturing operations in other countries as the firm is at a disadvantage compared to other players which import finished products.

He said the firm has requested government to consider providing incentives to local manufacturers like Nestle Philippines which use local agricultural produce for goods.

Providing incentives to local manufacturers, he said, is seen to create a level playing field.

“From Nestle’s point of view, what we have raised to them (government) in terms of incentives is we are the only local coffee manufacturer in the Philippines now. We are buying as much coffee as we can. Our competitors are importing coffee. We are at a disadvantage because sugar prices are cheaper, electricity costs are lower. For example, if you import finished products from Indonesia or Vietnam, you make more money because the costs there are lower. Whereas, here in the Philippines, we still manufacture here, our costs are high,” he said.

Nestle Philippines manufactures the Nescafe Classic coffee and coffee mixes.

Apart from providing direct employment through the coffee manufacturing operations, Nestle Philippines also supports local coffee growers by buying coffee beans.

At present, Nestle Philippines buys more than 50 percent of its coffee bean requirements from overseas as local supply is not enough to meet demand.

Nestlé Philippines has manufacturing facilities in Cabuyao (Laguna), Cagayan de Oro, Lipa (Batangas), Pulilan (Bulacan) and Tanauan (Batangas).