Nestle, Dabur, Coca-Cola, Mondelez and P&G invest heavily amidst demand slowdown
The demand for mainstream products has been lukewarm. But demand for premium products, specially in urban markets, has held steady.
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Large consumer goods companies like Nestle, Dabur, Coca-Cola, Mondelez, and Procter & Gamble have lined up big investments in the country, stated a media report. This move is in order to push more premium products despite an ongoing slowdown in demand witnessed for mass products.
As per Suresh Narayanan, chairman, Nestle, the company is investing seven percent to eight percent of their turnover on capex (capital expenditure). He further stated that food inflation was hurting the company, but they had committed investments of Rs 6,500 crore into the India market till 2025.
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Fast moving consumer goods company Dabur announced its second highest capex at Rs 135 crore for a greenfield plant in South India. The company’s chief executive officer Mohit Malhotra stated that they banked their expectations on the new financial year to improve the demand situation. Malhotra stated that he was looking at both urban and rural markets to drive growth.
The demand for mainstream products has been lukewarm, but for premium products, specially in urban markets, has held steady. Hindustan Coca-Cola Beverages, the bottling partner of Coca-Cola invested Rs 3000 crore in Gujarat to manufacture juices and aerated drinks.
Mondelez and Procter & Gamble (P&G) invested Rs 2000 crore and Rs 4000 crore, respectively, in new plants, and these will be operational in the next few years.
