Coffee beans being roasted at a factory in Africa © Photo by CARL DE SOUZA/cds/AFP via Getty Images

July 20th(Supply Chain) – Nestlé is spending R79m (around $4.5m) to build a production plant in Babelegi, Hammanskraal to meet local demand and support economic development.

The factory will produce a range of coffee mixes in a bid to meet growing demand for the drink in the region, streamline supply chain operations and reduce its environmental impact.

Nestlé, which owns brands including Nescafé and Häagen-Dazs, has seen demand rocket in South Africa since the onset of the pandemic, with three-quarters (75%) of its revenue from across southern and eastern Africa originating from the country.

Nestlé East and Southern Africa region business executive officer for coffee and beverages, Carl Khoury, said: “We are excited to officially open our Nescafé coffee mixes manufacturing plant and demonstrate our dedication to the local market.”

He said the move follows national policies including South Africa’s Reconstruction and Recovery Plan to develop infrastructure and industry and enhance its energy and food security.

“We take pride in our investment in this production plant as it reflects our dedication to nurturing the potential of the region and contribution to rebuilding the economy,” he continued.

The initiative, which has been led by an all-female start-up team, will source 46% of ingredients locally, the firm added.

Cllr Hannes Coetzee, MMC of economic development for the City of Tshwane, said it will not only guarantee coffee production, “but also uplifts our community”.

Coetzee added: “The investment was spent on procuring machines and equipment, training our local workforce, conducting production trials, and benefiting the City of Tshwane through local procurement of services providers, which played a crucial role in the successful completion of the project.”

The Department of Trade, Industry and Competition of South Africa’s director of investment promotion, Brian Soldaat, said the investment supports the growth of the local economy by localising production, and sets a “positive example for the industry, showcasing the importance of collaboration with local communities, economic development and sustainable business practices”.