Nestle to produce half of its products in Yangon

Imports of Nestle products to Myanmar would be reduced to 50 per cent next year when the firm’s recently-opened factory in Dagon Seikkan Township of Yangon reaches full production.

HayriDevrimCobek, managing director of Nestle Myanmar, said in an exclusive interview all the Nestle products in Myanmar have been imported from other Asean countries until this year, but its factory plans to produce half of them next year. 

“We will continue to import half of our products from different countries. Thailand is obviously our main supplier right now, but we are also importing from Vietnam, Malaysia and the Philippines,” he said.

In a bid to ensure deeper, wider distribution of its products throughout the nation, the firm has joined forces with Myanmar Distribution Group and other local partners since it formed a Yangon-based subsidiary in September 2013. 

“We will focus on all channels so our products can reach everywhere. We have products for different age and socioeconomic groups in Myanmar. Both wholesale and retail shops play an important role in our distribution strategy,” he said.

Cobek said the firm aims to reach 80,000 retail shops across Myanmar soon. He also plans to launch a new product every two months, as his team has spent a couple of months designing products especially for Myanmar people.

“To develop a new product, it usually takes between 12 and 16 months. We have to do a lot of tests before the launch of a product to ensure high quality. The quality is non-negotiable for us. We never compromise on the quality of our products,” he said.

He said the firm would keep on innovating and launching new products, in addition to expanding its distribution network through different channels including its recently-launched Facebook page.

Currently, the firm has distributed six major brands in the market: Lactogen, Cerelac, Milo, Nescafe, Bear Brand and Maggi. He claimed that all the products were designed to enrich the quality of life and to contribute to the healthy future of Myanmar people of different ages, from birth to the elderly.

“Nestle has over 2,000 brands globally. Among them, we have chosen six to invest in Myanmar. We want our international quality products to reach everywhere at an affordable price,” he said. 

Cobek is proud to say that most of the firm’s products are market leaders in Myanmar, except for Bear Brand enriched malted milk, which was launched two weeks ago, and Nescafe, which has to compete with over 50 coffee brands. 

To him, Bear Brand is a localised innovation specially designed for Myanmar in which real milk is used to help Myanmar fight against iron deficiency. According to World Health Organisation, nearly half of adult women in Myanmar suffer from iron deficiency.

“We are on the top ranking in the [coffee] mix category where we are competing with local companies who are doing very well in terms of local taste. We are looking more into all categories,” he said.

“Instead of looking at the amount of market share which does not cover the whole of Myanmar, we are looking for the trends right now such as who is gaining, losing, etc. Globally, Nestle is the leader in coffee. Our ambition is to achieve the same position in Myanmar.”

He said sales volume should grow four times in four years, putting Nestle in the top three in Myanmar’s food and beverage business. To achieve this, the firm has invested US$25 million (Bt817 million) in Myanmar, and will continue to invest further.

He said the firm would prioritise three things – human resources, local manufacturing and branding. The workforce has grown threefold from 43 to 150 staff within one and a half years. Among them, only 10 are expatriates and the local employees’ average age is 29.

Though Cobek considers finding and recruiting skilled workers as a key challenge, he seems impressed by Myanmar people’s willingness to learn new skills.

“I have managed people from 35 different nationalities throughout my career. So I can really see the difference in Myanmar. The average learning ambition is very high and the energy is very impressive. We are investing in our people on that front,” he said.

Source: Eleven Weekly Media