Malaysia will house production of Nestlé breakfast cereals for the first time and export brands to neighbouring Asian countries.
Cereal Partners Worldwide (CPW) - Nestlé and General Mills' joint venture - has opened a CHF 35m ($37.7m) manufacturing site in the south of Malaysia. The build was initially announced in April 2011 and production commenced early this year.
Malaysia was selected as a location due to its readily available quality local ingredients and investment-friendly environment and infrastructure, the firm said.
Meike Schmidt, corporate spokesperson for Nestlé, told BakeryandSnacks.com: "This new manufacturing facility allows increased capacity and reach across Asia, transforming Malaysia into a regional producer and exporter of breakfast cereals."
"Overall, breakfast cereal consumption is growing fast in Asia. Across the region, we see potential for growth in this category. Our breakfast cereals are made with whole grain and deliver important nutrients such as calcium and iron. They underline our commitment as the world’s leading Nutrition, Health and Wellness company," Schmidt added.
Asia Pacific’s breakfast cereal market is worth around $1.7bn, according to Euromonitor data.
Wen-Wen Paquette Wang, regional director for CPW in Asia, said the new factory has redefined Malaysia as an exporter of breakfast cereals.
“More than half of the breakfast cereals produced at the site will be exported to markets across Asia such as Singapore, Indonesia, Hong Kong, Taiwan, Pakistan, Bangladesh, Vietnam, Sri Lanka and Fiji,” Wang said.
The factory will manufacture and export branded products such as Koko Krunch, Honey Stars, Cookie Crisp, Duo and Milo. Production will also see CPW source up to 70% of its raw materials from Malaysia.
Schmidt said that local sourcing will have a positive ecological and economical impact on the firm's supply chain and the communities in which it operates.
Asian cereal hold
The move represents CPW’s third cereal production in Asia – the other two of which are in China and the Philippines.
Peter Vogt, managing director of Nestlé Malaysia, said the production site will change business dynamics in the country and establish a new dimension to the brand’s relationship with Malaysian consumers.