Nestle invests Rs. 5 billion in coconut milk plant

Single largest investment made in Sri Lanka


Enhancing capacity for dairy and coconut milk powder

Nestle Lanka PLC has announce in its annual report that "we just completed an investment of over Rs. five billion in our new plant for processing coconut milk" saying that "it is the single largest investment made by Nestle in Sri Lanka and signals our commitment to the country."

The company’s revenue in the year ended Dec. 31 at Rs. 37.33 billion was marginally down from Rs. 37.6 billion the previous year. The profit after tax also was down marginally to Rs, 3.49 billion from Rs. 3.64 billion a year earlier though the pre-tax profit was up to Rs. 4.94 billion from Rs. 4.73 billion in 2017.

One of the highest dividend payers among companies quoted on the Colombo Stock Exchange, Nestle maintained the previous year’s dividend level of Rs. 50 per share although earnings per share was down slightly to Rs. 64.88 from Rs. 67.67 the previous year.

Net assets per share were up to Rs. 104.89 from the previous year’s Rs. 89.36. The Nestle share averaged Rs. 1,726.03 on the Colombo Stock Exchange down from Rs. 1,913.32 a year earlier. It closed the year at Rs. 1,700 up from Rs. 1,626 the previous year.

The company’s chairman, Mr. Suresh Narayanan commented that 2018 clearly demonstrated that the food and beverage sector is going through a significant amount of change and disruption, much of it influenced by external factors and consumer behavior.

"Today’s consumer placed much higher importance on products that not only complement their lifestyles but also have a positive social impact. Nestle is well placed to cater to this, providing quality, nutritious food and beverages that are both delicious and convenient," he said.

They had undertaken a number of product innovations and renovations over the year. In addition to reducing sensitive nutrients such as sugar, salt and fat while maintaining good taste, many of their foods and beverages especially intended for children included added micro-nutrients such as iron, Vitamin A, calcium and zinc.

To support the company’s growth they are increasing operational efficiencies and focusing on cost savings, specifically in manufacturing, procurement and administration.

"We are simplifying our manufacturing footprint and optimizing our factory to utilize capacity more effectively," he said,

Managing Director Fabrice Cavallin reported that they had paid a total of Rs. 7.5 billion to local dairy farmers and the coconut industry for their produce last year training thousands of farmers to help improve the quality and yield of their produce.

"While we foresee a challenging year ahead, where we will have to manage the impact of the strong devaluation of the Sri Lanka rupee, I am confident that the food and beverage market will see its expected recovery in the near future and that we are well positioned, with our strong consumer-centric brands, to drive growth, he said.

Nestle S.A. with 90.82% of the company is the dominant shareholder with several foreign and local funds holding much of the balance. Local investors include the Insurance Corporation (0.34%), EPF (0.19%) and Union Assurance (0.14%).

A total of 5,321 shareholders are on the register with the majority (4,884) owning up to a thousand shares.


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