FMCG giant Nestle has invested Rs 287 crore (50 million Swiss Francs) in a research and development (R&D) centre at Manesar in Haryana. This is company’s first investment in an R&D center in India and is a part of Nestle’s global plan to focus on emerging markets.
“Nestle’s investment in India reflects its long term commitment to strengthen R&D capability in emerging markets. We will be hiring locals for our India centre and are also tying up with different universities for recruitment,” said Paul Bulcke, global chief executive officer, Nestle.
The centre will be recruiting 40 engineers in India to start with. Globally, there are 5,000 people involved in Nestle’s R&D activity.
The main idea to expand through an R&D centre in India is to understand the local consumer’s eating habits and taste preferences as well as greater expertise in using and processing local ingredients to develop products for India and beyond, noted Bulcke.
With opening of this centre, the company aims to extend the range of mainstream products it currently offers in the country particularly in noodles, cereals and dairy categories, he added.
Last month, the company announced plans to increase the number of R&D facilities it has in China from two to four by 2013. Nestle has 32 R&D centres worldwide. “The scale that we operate in China is three to four times bigger than India. Hence the investment is higher,” said Nandkishore.
Nestle employees 7,000 people in India and its products are sold through 40 lakh outlets across the country. In 2011, Nestle had a global turnover of 85 billion Swiss francs, out of which India contributed 1.5 billion Swiss francs, which is less than 2 per cent.
The company at present gets 40 per cent of its business from emerging markets like India and China. Nandu Nandkishore, SA Zone Director (Asia, Oceania, Africa and Middle East), Nestle said, “ By 2020, we expect 50 per cent of our business to come from emerging markets as they are faster growing than the developed markets.”
(Edited by Prem Udayabhanu)