Swiss multinational food and drink processing conglomerate Nestlé has injected an additional US$132 million into its coffee business in Vietnam, the world’s second-largest coffee exporter.
The latest capital inflow puts total foreign investment in Nestlé Vietnam, which was founded in 1995, at US$730 million and serves to double the company’s coffee product manufacturing capacity at its Tri An factory in Dong Nai province near Ho Chi Minh City, the country’s southern economic hub.
The sum does not include around US$700 million the Swiss conglomerate uses annually to buy coffee beans from Vietnamese farmers, says Nestlé Vietnam CEO Binu Jacob. These purchases, he adds, account for one-fifth or one-fourth of total coffee beans harvested annually in Vietnam.
Nestlé’s latest investment, Jacobs notes, will turn the facility in Dong Nai into one of the Swiss multinational’s largest coffee export factories in the world, supplying “premium coffee to many developed markets, such as Japan, North America and Europe”.
The conglomerate, Jacobs elaborates, believes in Vietnam’s future as a global and regional manufacturing hub and will continue to expand and invest in it. “Indeed, Nestlé Vietnam is recognised as one of the most efficient and flexible operating systems in all markets where Nestlé is present.”
Nestlé Vietnam, which currently operates four factories and two distribution centres in the country, is one of the leading foreign investment recipients in the Southeast Asian country, the world’s top supplier of robusta coffee. Robusta is widely used in instant coffee beverages, such as Nestlé’s Nescafe brand.
Vietnam is struggling to contain the highly infectious Covid delta variant, and strict lockdown orders in its exporting hub Ho Chi Minh City between June and September have affected overseas shipments of coffee and other goods like shoes, clothing, electronics and semiconductors. Vietnam, according to official data, shipped overseas 1.1 million tonnes of coffee between January and August, 6.4% lower than during the same period last year.
