Nestle Hikes Capacity at Spain Coffee Plant

Nestle Hikes Capacity at Spain Coffee Plant

Nestle Hikes Capacity at Spain Coffee Plant

Nestle has recently become the latest international firm to bet on Spain as an investment hotspot.

In March it announced a 102 million euros investment in a new coffee production facility at its plant in Gerona, north east Spain. The project is expected to create around 300 jobs in the construction phase and an additional 40 at the plant when it is fully operative by the end of 2017.

The new installation will increase the plant’s output by 30 percent, making it Nestle’s biggest Nescafe  production operation in Europe and the third largest in the world. The additional coffee output will be for export, primarily to other European countries.

The Swiss-based multinational has six factories in Europe and around 30 world-wide. The Gerona plant produces Nestle’s flagship soluble coffee brand Nescafe, as well as its Dolce Gusto coffee capsules.

Nescafe has a 50 percent share of Spain’s soluble coffee market.

 

INNOVATION DRIVES INVESTMENT

Nestle first expanded its Nescafe coffee operations to Spain in 1968. The Gerona factory was then selected in 2007 as the site for a new production plant for the Dolce Gusto brand. This decision proved to be strategically successful for Nestle, boosting its Spanish exports even when the country was struggling with tough economic conditions.

Over the period 2007-2014, Nestle had already invested 236 million euros in the plant and the workforce had increased by around 300 people.

Technology and innovation remains a key driver for Nestle’s investments in Europe and Spain is no exception. Technological advances mean the new line at the Gerona plant will use 40 percent less energy and 33 percent less water per kilogram of product manufactured than the existing facilities.

The new plans for Nestle’s Gerona factory will make it more competitive within the group and it is likely to attract further investment in the medium-term.

 

SPAIN RECOVERY LURES INVESTORS

Spain’s economic recovery has been rekindling overseas interest over the last 18 months.

Several international players, like Japanese electronics and IT giant Fujitsu and German discount retailer Aldi, have announced expansion plans. A decline in labour costs, cuts in corporate tax and a raft of government incentives for companies which create jobs in Spain have all helped lure these foreign firms.

Amid this positive business environment, Nestle hopes its 2015 results will surpass those of 2014, when sales rose 0.9 percent – the first growth rate registered by the company since the crisis. The forecast up-tick in consumption as the Spanish economy continues to expand will contribute to boosting Nestle’s future performance.

For information on investment in Spain, contact corporate law firm Argali Abogados.

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