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Nestle invests in premium Russian choc plant

By Jane Byrne , 30-Aug-2010

Nestlé reports that an upgrade to its premium chocolate manufacturing facility in the Samara region of Russia will transform it into a key competence centre for confectionery products in Europe.

Two production lines from a Moscow plant owned by Nestlé are being transferred to its Confectionery Union Rossiya factory, in a move that will create 149 new jobs, said the Swiss group.

And Laurent Freixe, Nestlé executive VP and zone director for Europe, noted that the transfer of the premium brand Comilfo production lines to the Samara facility would strengthen the factory as an R&D centre for confectionery products.

Nestlé has built up a strong presence in Russia over the past 15 years. The Swiss group operates 13 production facilities in the country, and has 10 sales offices and around 10,000 employees.

In 2009, the company recorded double-digit growth rates and sales in Russia of around CHF2bn (€1.5bn) from its chocolate, coffee, infant cereals and culinary products.

But, earlier this month, when posting gains of 7.5 per cent in net profit for the first six months of 2010, Nestlé said that while it had good performances in many categories, ice cream and confectionery remained soft for the food giant in Russia.

The company noted strong performances in emerging markets, particularly the South Asia region, including India, Vietnam and Thailand, in Indonesia and China as well as gains in the Central/West Africa region. But growth in Oceania and Japan was flat, it added.

In the trading statement issued on 11 August, Nestlé pointed to the success of its éclairs brand in India especially.

But Jonathan Thomas, principal market analyst at Leatherhead Food Research, said that the Swiss group’s growth figures there are unsurprising, given the recognized buoyancy of the chocolate markets in certain markets within the developing world:

“The Indian market has been growing by up to 18 per cent per annum in recent years, while growth of up to 12 per cent is being observed in China.”

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