Nestlé held on Wednesday the inauguration ceremony of its state-of-the-art coffee factory in Laixi, Qingdao, Shandong Province. The construction and commissioning of the new factory took 13 months. The total investment is RMB 880 million and covers an area of 226,000 square meters.

The project involves a NESCAF? coffee extraction and spray drying production line as well as all necessary industrial services and Infrastructure facilities. Initially the factory will produce coffee powders to be used for producing and processing mixed coffee drinks at Nestlé's coffee factory in Dongguan and its beverage factory in Shanghai with potential for expansion and finished goods production in the future. The factory is adjacent to Nestlé's existing Laixi liquid milk facility which has been operating successfully since 1996.

Paul Bulcke, CEO, Nestlé S.A., said "The position of the Chinese market in Nestlé's global strategic growth will be enhanced. The newly built factory fully demonstrates Nestlé‘s continued commitment in the Chinese market and lays a solid foundation for the company's future development."

One Shandong Provincial leader said, "Our province has gained rapid industrial development, thanks to giant enterprises, with their brands and products, such as Nestlé. Nestlé started investment and construction of factory in Laixi in 1994. After 20 years of development, Laixi's dairy herds now total 92,000. The income of local farmers grows by RMB 450 million per year.

Laixi City's total production of meat, eggs and dairy products ranks No.1 in Shandong Province and is developing in a stable manner. The city is also rated as China's cutting-edge food industry city. Today, the inauguration of the freshly invested coffee factory will lay a new foundation and create new advantages for Nestlé's market expansion and fast development. Meanwhile, it will inject energy and vitality to Shandong, further spurring its food industry's growth."

Roland Decorvet, Chairman & CEO, Nestlé GCR commented: "Nestlé has been investing in a dairy-base in Laixi since 1996. Our Nestlé Qingdao factory not only produces high quality and delicious foods for consumers, but has also greatly contributed to developing an area that previously had no dairy farming tradition into a productive and efficient milk district. Nestlé's success is inseparable from the continued support of the local government.

The new investment is another important milestone for our win-win friendly partnership between Nestlé and Laixi." Nestlé's development vision in China is to provide local consumers with products they need. NESCAF?'s new factory, same with its dairy factory, will continue to Create Shared Value for local economy and community development.

Nestlé commenced selling NESCAF? in China in the mid 1980's. It quickly became popular and Nestlé decided to proceed with local production. In 1988, Nestlé established Nestlé Dongguan Ltd. in Dongguan, Guangdong Province to produce NESCAF? and NESCAF? COFFEEMATE. Hereafter, Nestlé increased coffee production line in Nestlé powdered beverage factory in Shanghai in 2008. NESCAFé was awarded "The Most Loved Brand" by Chinese University Students during the past 6 consecutive years. NESCAFé's coffee development program in Yunnan Province won recognition from various social sectors and was awarded the United Nations' 2012 Global Business and Development Award. It was also rated as the Best Practice to Promote Societal Development by the UN Global Compact Network China the same year.

Background

Nestlé in China

Nestlé is the world's foremost Nutrition, Health and Wellness company with sales of CHF 92.2 billion in 2012. The company was one of the first multinational companies to enter the Chinese market in a fully committed way after the open door policy. In 1990 Nestlé started its local production by establishing its first factory in Shuangcheng, Heilongjiang Province.

Today, Nestlé operates 33 state-of-the-art factories in the Greater China Region and employs 50,000 regular employees. 90% of Nestlé products sold in China are locally manufactured.

Nestlé business activities are guided by its commitment to Creating Shared Value for both the company shareholders and the local communities. The company's signature Creating Shared Value examples in China are milk district development in Inner Mongolia, Heilongjiang and Shandong and the coffee development program in Yunnan Province.

Well-known Nestlé brands marketed in the Greater China Region include: NESCAFé, NESPRAY, KLIM, CARNATION,LACTOGEN, NAN, NUTREN, NESVITA, NESTEA, MILO, POLO, FIVE RAMS, CHEERIOS, FITNESS, NESTLé EAGLE, DAIRY FARM, PAK FOOK, NESTLé PURINA PETCARE, NESTLé PURE LIFE, NESTLé DEEP SPRING, MAGGI, TOTOLE, DASHAN, YINLU, HSU FU CHI, and WYETH.

Nestlé in Shandong

Nestlé has been investing in Laixi since 1996. The company's state-of-the-art factory produces high quality Nestlé dairy products, including NESTL? UHT Liquid Milk, NESTL? Whipping Cream, NESTL? EAGLE Sweetened Condensed Milk, NESTL? CARNATION EVAPORATED Milk. Nestlé has provided free training and technical assistant to the local dairy farmers and has helped build an area that had no dairy farming tradition into a productive and efficient milk district with over 80,000 cows. Dairy farming has become a major source of income for the local farmers. Subsequently, Laixi has been named a "top 100 milk production counties in China" by the authorities.