New Delhi: The local arm of Swiss consumer goods company Nestle will invest ₹700 crore initially over the next two years to set up a new plant for Maggi noodles, nearly four years after the brand was hit by its worst food crisis in the country.
The construction of the plant will commence soon in Gujarat, the company informed stock exchanges on Friday. This will be Nestle’s ninth factory in India.
“The state-of-the-art, environmentally sustainable factory for Maggi noodles will involve an initial investment of nearly ₹700 crore over the next two years," the company said in the statement.
This makes it the company’s first such investment in dedicating a new manufacturing facility for production of the instant noodle brand, after a nationwide ban in 2015 hit sales. India’s food regulator banned the sale of Maggi noodles for almost six months over allegations that the packaged food product contained more than permissible levels of lead and MSG. This forced Nestle to withdraw stocks of Maggi across India. However, the brand was relaunched later that year.
At present, Maggi instant noodles are manufactured at three plants in India with lines dedicated to the instant noodle brand. Two more plants partially produce Maggi. The new plant in Gujarat will further help boost the brand's sales.
Last year, the company announced that Maggi had attained over 60% marketshare since its withdrawal in 2015. Before the crisis, Maggi commanded a 75% share of the instant noodles market. It, however, touched its pre-crisis level mark in terms of value last year.
Maggi competes with ITC’s Yippie Noodles in India.
The company on Friday also announced its earnings for the second quarter ended June 2019. Profit for the maker of Nescafe coffee and Maggi noodles was up 10.8% at ₹438 crore. Total sales for the quarter were up 11.35% at ₹2,983.83 crore. Domestic sales growth for the company increased by 13.1%. “...We have now delivered 10 straight quarters of volume & mix led growth. Our continuing momentum is a testimony to the unrelenting efforts of our employees, partners and other stakeholders, as well as to our quest for consumer relevant, science based innovation and renovation," said Suresh Narayanan, Chairman and Managing Director, Nestlé India.