Nestle increases local sourcing in South Africa with new processing plant
Nestle opened a processing unit for its coffee brand Nescafe on Tuesday at its factory in Hammanskraal near the capital Pretoria as it moves to tap into an increasing demand for coffee consumption in South Africa.
Nestle had said last month that it was ramping up local raw material sourcing in Nigeria and other African countries to reduce foreign exchange exposure.
Food producers in South Africa have been hit by a combination of long hours of power cuts forcing them to run expensive diesel generators and a massive slump in domestic currency making imports dearer.
Both issues are making the impact of higher food price inflation worse.
“Currently more than 40% of the raw material is locally sourced but you know the ambition,” Carl Khoury, business executive officer at Nestle East and Southern Africa Region, told Reuters.
The company’s communications executive Mota Mota said the plant would aim to reach 90% local sourcing in “the immediate near future.”
Nestle, which runs five factories in South Africa, already produces Cremora coffee creamer and Maggi instant noodles, with the raw materials for both are heavily sourced locally.
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