12-06-2012, 05:00 PM
Nestle India
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Company background:
Nestle India is the largest dairy products company in India listed on the bourses. A subsidiary of Nestle S.A. of Switzerland, the company was incorporated in 1959. It set up its first factory at Moga, Punjab in 1961. However, the company's history goes back to 1912, when it began importing and selling products in India under the name of `The Nestle Anglo Swiss Condensed Milk Company (Export) Limited'.
With a broad product portfolio of milk products & nutritions, beverages, prepared dishes & cooking aids and chocolates & confectionary, the company generates above Rs.3,500 crore income annually.
Its milk products & nutritions portfolio encompasses a wide range of products right from milk and skimmed milk to value added products like condensed milk, curd, ghee, yogurt and raita. These products are sold under various popular brands -- Nestle Everyday, Nestle Milkmaid, Nestle Milk, Nestle Fresh n Natural etc. Owner of the most famous Cerelac brand, Nestle India enjoys the leadership position in infant milk foods business with a market share of 68.4 per cent (2006--07).
The company has a capacity to produce 72,502 tonnes of milk products & nutritions per annum, spread over seven plants located across India -- Punjab, Haryana, Uttarakhand, Goa, Karnataka and Tamil Nadu. It processes over 3.3 lakh tonnes of milk and nearly 10,000 tonnes of milk powder per annum. The milk is procured from over 85,000 farmers in Moga, Punjab.
Sector overview & forecasted growth:
The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labor costs and presence across the entire value chain gives India competitive advantage. According to a study by the McKinsey Global Institute (MGI), 'Bird of Gold': The Rise of India's Consumer Market, Indian incomes are likely to grow three-fold over the next two decades and India will become the world's fifth largest consumer market by 2025,moving up from its 2007 position as the world's 12th largest consumer market. India ranks second in the Nielsen Global Consumer Confidence survey released on January 7, 2010 an indication that recovery from the economic downturn is faster in India with consumers more willing to spend. The survey showed that in addition to the emerging markets of Indonesia and India, eight of the top ten most confident markets in the fourth quarter of 2009 came from the Asia Pacific region.