Why PH is Nestle's most important market in ASEAN

Posted at 05/26/14 12:38 PM

MANILA, Philippines - Consumer goods giant Nestlé has been in the Philippines for over a hundred years, and it continues to expand its operations.

In an interview on ANC's Headstart with Karen Davila, Nestlé Philippines chairman and chief executive officer John Miller said the company considers the Philippines as its most important market in Southeast Asia.

"The Philippines, amongst all of the Asean nations, is in fact our most important market... We've been here for 103 years and that's allowed us to build a very special relationship with our consumers. Over that time, we've been able to build a very fine business. We have done that in partnership with many different agencies, the government, our distribution partners and that has put us in a privileged position," he said.

Nestlé Philippines currently has six factories in Cagayan de Oro, Cabuyao and Canlubang in Laguna, Pulilan in Bulacan, and Tanauan in Batangas. It manufactures majority of its brands, such as Nescafe and Bear Brand, locally for the Filipino consumer.

"I'm delighted to say that four and a half years ago, we had four major manufacturing units here in the Philippines. Today we have six. One we built in Tanuan, where we invested P5 billion... We are manufacturing 95 percent of the brands we market right here in the Philippines. We also export, about five percent," he said.

With ASEAN integration in 2015, Miller said the company is "looking forward to opportunities to serve other nations, not just in ASEAN but further afar."

Asked whether ASEAN integration would mean the company would start importing cheaper products from other countries, Miller said "absolutely not."

The Nestlé Philippines CEO cited the Filipino coffee bean, which he called as the "most productive bean" it can source in the region.

"We can extract more coffee from the (Filipino) bean from any other coffee bean. We have a very strong vested interest in working with coffee farmers and this is why this year alone we distributed 3.7 million coffee seedlings (to farmers)... By 2020 we will source 70 percent of our coffee requirments in the Philippines. For us, coffee farming in the Philippines has a very bright future," he said.

'Great time for the Philippines'

As the Philippine economy continues to grow, Miller said now is a "great time" for the country.

The biggest challenge, he said, is "staying apace with consumers."

"We say we are very much the life partner of the Filipino people. The Philippine environment is nothing if not exciting. We saw a lot of that excitement last year, both good and challenging. Great excitement because of the growth of the economy. We genuinely believe this is a great time for the Philippines, a great time for the nation with fantastic economic growth... Of course, the challenges are climatic. At times, political," he said, citing the earthquake and typhoons that hit the country last year.

Miller also praised the Aquino administration for its commitment to good governance, which has helped improve the business environment.

"With the Aquino government coming in in 2010, we've seen significant changes. The government's commitment to probity, good governance has created a climate of trust and improved business climate," Miller said.

As Aquino's term ends in 2016, Miller said he is optimistic that the President's reforms will continue.