Household name Nestle looks at long-term commitment

PUBLISHED : Sunday, 01 August, 1999, 12:00am
UPDATED : Sunday, 01 August, 1999, 12:00am

If you are reading this article over a breakfast coffee, or eating a chocolate bar on the bus, there is a good chance that you are contributing to one of Switzerland's biggest success stories.

Nestle, the world's largest food maker, has been selling foodstuffs from instant noodles to ice cream for more than 130 years, and has been distributing in Asia for almost a century.

Last year, Nestle's sales in the region declined due to the economic turmoil, but the company continued its commitment to Asia.

'This situation did not lead our company to reduce its presence in the region,' Nestle spokesman Hans-Jorg Renk said. 'On the contrary, Nestle took advantage of legislative changes to increase its participation in its local operations in some countries.' Mr Renk said this was in line with the company's long-term thinking.

'Recent developments confirmed that it is worth having that kind of approach,' he said. 'Virtually all our operational companies in Southeast Asia have reverted to growth during the first half of this year.' Nestle has invested about US$600 million in China in the past decade and now has 15 plants generating $400 million in sales last year.

While its everyday products keep Nestle in the public eye, another Swiss-based giant, Asea Brown Boveri (ABB), has been building its own Asian niche. ABB, the world's biggest electrical engineering company, has made China its priority in the region, and recently won a $340 million order to supply transmission equipment for the Three Gorges dam project. Asian orders have expanded 31 per cent in the first half, driving group net income up by 32 per cent.

'Our results are encouraging, especially considering that industrial demand in many markets is growing very slowly,' said ABB president Goran Lindahl.' Stephen Foxwell