Due to such optimism, Nestle president and chief executive officer Juan B. Santos said the food conglomerate is projecting a five-percent increase in its sales this year. "This year is a better year," he said.
Last year, Santos disclosed, Nestle’s total sales hit P40 billion, a five- percent increase over its 1999 sales figure.
In fact, Santos said, Nestle had projected a flat sales growth last year and instead managed to post a five-percent growth.
With the economy expected to perform better this year, Santos said that Nestle is confident that it will be able to post at least the same five percent growth in sales. "Last year was a good year," this year should see – barring an unfavorable foreign exchange – the same magnitude of increase," he said.
The expected growth, Santos said, is still expected to come from the sale of Nestle’s core milk and coffee products.
Nestle’s milk products, Santos said, accounted for 55 percent to 60 percent of its total sales.
However, Santos expressed concern that the second round of price increase it had to effect this year –due to the foreign exchange situation – may affect its sales.
"The first price increase we imposed this year did not have that much of an effect on consumer demand," he said.
However, for the second wave of price increase, Santos admitted that "we have to see the impact on demand."
Nestle, Santos assured, is already seeking ways to soften the impact of the second wave of price increase.
Some of these measures, Santos said, are coming out with a smaller size or more efficient packaging materials.
Nestle’s optimism also extends to the export capacity of its Cabuyao and Cagayan de Oro plants.
Nestle projects that the export capacity of its Cabuyao and Cagayan de Oro plants would increase by 20 percent next year and would continue posting a yearly growth of between 15 percent to 25 percent.
Nestle is investing P3 billion in the next two years to expand the operations of its Cabuyao and Cagayan de Oro plants.
The two plants are being eyed to serve as the ASEAN supply center for infant nutrition and filled milk products. – Marianne Go