Food companies are among the increasing number of multinationals stepping up their investments in Asia, as a result of rapid urbanisation, rising middle-class and consumption, and a burgeoning demand for infrastructure in the region, according to a survey of global business leaders by Pricewaterhouse Coopers (PwC).
The report, 'Towards resilience and growth: Asia Pacific business in transition'
, said: “The promise of business growth from rising middle-income consumers has been clear for a decade. Now businesses are actively investing for a future of consumption-driven growth in Asia Pacific. Thus, product development, services and distribution capabilities…are capturing over half of all increases in investment over the next year.”
These insights are reiterated in KPMG’s 2013 Food and Beverage Industry Outlook Survey
, which highlights that 17 per cent of business executives surveyed are focused on increasing spending in “geographic expansion into or among high growth markets outside the US” over the next year.
There have been several high profile examples of the food sector’s investment in the region over the past six months especially among FIA Member companies. Earlier this month Kellogg Company
announced an investment in a new US$130million halal manufacturing facility in Bandar Enstek, Negri Sembilan. The new manufacturing facility is expected to significantly increase the company’s production capacity across Asian countries in the region.
At the groundbreaking for the new plant, Kellogg Company’s Asia-Pacific President Mr Amit Banati said: “This is a big step for us in ensuring that we stay relevant and expanding our supply chain capabilities. Building a new facility highlights the focus and commitment that the Asia-Pacific region is receiving from Kellogg Company.”
More recently, Nestlé
announced a strategic partnership with the Singapore’s Agency for Science, Technology and Research A*STAR to help enhance the company’s expansion in research and development (R&D) in Singapore. The partnership provides a platform for research in areas including nutrition, packaging, food science and technology, and biotransformation.
In a press statement, Nestlé’s Chief Technology Officer, Stefan Catsicas said: “Our goal is that closer collaboration with A*STAR will enable our team of food technologists, food engineers, chemists and microbiologists to share their knowledge and understanding in multiple areas of food science and to strengthen Nestlé’s position as a global leader in food science, nutrition and technology.”
The Hershey Company
is helping to meet the demand for confectionery by last year announcing plans to build a new confectionery manufacturing plant in Johor, Malaysia. Representing the company’s single-largest investment in Asia in 18 years, the new plant will include innovations in automated candy-making technology, including proprietary equipment and systems developed to Hershey’s specifications.
Last December, Mondelēz International
also announced its investment plans to develop one of its largest manufacturing plants in India. According to Mondelēz, the 134-acre multi-category plant will have an annual capacity of 250,000 tons in the end state and will “capitalise on the growing demand in emerging markets while also aggressively reducing costs and improving productivity”.
Other companies such as FrieslandCampina
have also invested in Singapore, Indonesia and China respectively over the past half year in R&D centres and processing and manufacturing facilities to ensure they are meeting the changing needs of the region’s consumers.
FIA Executive Director, Bev Postma, said these investments highlight the growing importance of Asia-Pacific to global food companies.
“Asia’s emerging middle class and rapid economic growth means that consumers are not only demanding more food, they are also looking for a broader range of safe, high quality options. At the same time, lifestyles are changing and people are looking for food that can be eaten on-the-run or prepared quickly.
“The investments being made by food and beverage companies, in infrastructure and innovation will enable them to better cater for these fast-changing needs and ensure that they are providing a diverse choice of high quality products that suit the tastes and needs of people across the region,” she said.
The Organisation for Economic Cooperation and Development
shows that by 2030, Asia will represent 66 per cent of the global middle-class population and 59 per cent of middle-class consumption.
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