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Nestlé injects $60m into Mexican cereal expansion

By Kacey Culliney+

28-Jan-2014
Last updated on 29-Jan-2014 at 09:59 GMT

Nestlé will nearly double capacity of its Mexico cereal plant with the $60m investment
Nestlé will nearly double capacity of its Mexico cereal plant with the $60m investment

Nestlé will invest $60m to upgrade and expand cereal operations in Mexico, doubling capacity at the plant.

The investment comes as part of a wider $1bn five-year cash investment into Mexico that will see two new factories built – one for infant nutrition and another for pet food.  

Nestlé said that expansion and upgrades to its cereal factory in the Western Mexican state of Jalisco was to align production with a growing breakfast market in Mexico - a sector that grew 4.7% in value for 2013, according to Nielsen data. The plant also supplies to the wider Latin American market.

The cash injection will see production at the factory almost double with an additional 2,000 square meters and equipment upgrades and new technologies installed, explained Lorena Herrera, senior corporate communication manager at Nestlé Mexico.

Extruders and dryers for grains and automated packaging are some of the new technologies being installed in the facility, she told BakeryandSnacks.com.

Slashing energy

Other technologies include dryers and toasters that use natural gas instead of steam, thus generating less CO2 emissions and water cooling towers that will generate estimated water savings of around 20%.

Nestlé will also install 350 solar panels to generate photovoltaic energy to heat water – generating energy savings of around 25%, Herrera said.

She said the technologies improved production thanks to improved ergonomics, automation and quality cleaning but also saved on water, gas and energy consumption.

Mexican breakfast cereal boom

Mexico’s bakery and cereal sector is set to grow at a compounded annual growth rate (CAGR) through to 2016 , according to Canadean.

The sector has, and will continue to be, fueled by healthier eating trends adopted by younger Mexican consumers as US influence, obesity concerns and marketing efforts take hold, said Ronan Stafford, Canadean reports analyst.

He said that in particular it was the 40 million consumers aged under 19 that were fueling growth and that targeting this group would be key to driving a hold in the market. He added that Nestlé and Kellogg were the cereal brands that had gained most traction in the market and been strong in marketing efforts.

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