Turkey a sales hotspot for Nestlé with the firm set to invest US$22m to expand capacity

By Tingmin Koe

- Last updated on GMT

Nestlé will be investing $22 million in its operations in Turkey. ©Getty Images
Nestlé will be investing $22 million in its operations in Turkey. ©Getty Images
Turkey has become Nestlé’s fastest growing market in the Middle East, Europe and North America, with the firm set to plough in TRY 100m (US$22m) to expand capacity and build new plants.

The sum will be invested by 2020, a Nestlé spokesperson told FoodNavigator-Asia.

Nestlé currently has two factories in Turkey.

"Turkey has become our fastest-growing market in EMENA (Europe, the Middle East and North Africa) representing emerging markets. Our headquarters has full confidence in Turkey and supports new investments,"​ Nestlé Turkey’s CEO and market head Felix Allemann told local media Daily Sabah​ during a media meeting this month.

The company achieved a growth rate of 17% from the activities in Turkey last year, which corresponds to a figure above the sector average, Allemann said.

Nestlé entered the Turkish market in 1875 with baby formula and opened the first office in Istanbul's Karaköy neighbourhood in 1909.

Overseas export

Allemann believes that exports from Nestlé Turkey will continue to grow.

"We exported some of the products we produced here to markets such as China, Russia and the U.S. Our exports will continue to increase,"​ Allemann said, noting that Turkey has a significant position in Nestlé exports. Currently, Nestlé Turkey is responsible for producing 92% of products sold domestically.

On the other hand, he said that the collaboration between Nestlé and Starbucks will grant them the right to sell Starbucks' strategic products outside their stores.

Nestlé has recently secured the global rights​ to market Starbucks consumer and food service products in a €6bn (US$7.15bn) tie-up that the company said will expand its presence in the premium coffee space.

"With this agreement, one plus one will equal three,"​ he said.

Middle East performance

Sales in EMENA (Europe, Middle East and North Africa) increased​ by 6.3% for Nestlé during the first quarter of this year, performing better than the AOA region (Asia, Oceania and sub-Saharan Africa) which grew by 2.3%.

The regional chief is confident that the market in the Middle East will continue to grow.

Yves Manghardt, Nestlé’s Middle East chief executive, earlier said that positive growth would continue in the Gulf Cooperation Council (GCC), though it would probably not meet levels of performance seen “five or six years ago, when the region was under a different overall economic context​”.

"But we remain very positive and see signs of recovery in some of the countries which have been more recently affected by the economic restrictions​.”

Growth in Saudi Arabia, which accounts for over a third of Nestlé’s regional business has been “softer​” in recent years after the government’s decision to drop subsidies hit purchasing power.

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