Nestle will build a factory in Vologda for the production of dry infant formula for children worth 3.5 billion rubles
The expansion of production will increase output and switch to the use of Russian raw materials, while the production cycle will be complete. The agreement on cooperation with the investor was signed today by Governor of the region Oleg Kuvshinnikov.
‘Nestle is making huge investments in localizing production in Vologda region, which is very important for the region. Back in 2013, the project to build a factory for the production of baby food was the first in the region to receive priority status. We are ready to provide state support for the implementation of the new investment project, – said Governor of the region Oleg Kuvshinnikov. – I thank the management of Nestle and the Ministry of agriculture for choosing our region as the base platform for implementing such a large-scale investment project.’ The project involves the reconstruction and expansion of the production capacity of the factory. An additional 60 jobs will be created, and the share of domestic raw materials will increase. The factory's products will be manufactured under the NESTOGEN brand.
The presentation was held in person and in absentia on the Vologda platform, the Russian and European management of the company, as well as Deputy Minister of agriculture Oksana Lut took part via videoconference.
‘Baby food is one of the most important categories for Nestle. The construction of a full-cycle factory is an important stage that will allow us to fully localize the production of dry infant formula in Russia. The new investment project will meet the growing demand of Russians for high – quality baby food - one of the most socially significant categories, and will meet the needs of society,’ said Marcial Rolland, Head of Nestle in Russia and Eurasia.
According to Oksana Lut, the production of baby food is one of the key and strategic directions in the Russian food industry. The Government of the Russian Federation and the Federation Council pay special attention to its development. Currently, the market for consumption of dry infant formula in the country is estimated at 40 thousand tons, 50% of this volume is produced in Russia. In order to increase the level of localization of production, in 2017, the Ministry of agriculture expanded measures of state support for baby food manufacturers, and capital expenditures in the amount of 20% of the construction cost were added to concessional financing.
‘We have been in dialogue with Nestle for a long time about the possibility of creating an enterprise for the production of dry infant formula with a high degree of localization. Now we are glad that the company is ready to implement such a project in Vologda region, and we are very grateful for the degree of localization proposed by the project. It is important for us to develop cooperation between producers of final products and raw materials, which are available in Vologda region,’ said Deputy Minister of agriculture of the Russian Federation Oksana Lut. - We hope that this project will allow our raw material producers to learn how to produce a product of the required quality. We are confident that Nestle's investments will be successful and effective and will provide additional development for the agricultural sector of Vologda region. The Ministry will support the implementation of this project in every possible way, and if necessary, provide support measures, and will do everything necessary for this.’
Nestle has been investing in Vologda production for 17 years. The factory of the final cycle for the production of dry infant formula in Vologda region was built within two years and launched in June 2019. However, raw materials were supplied mainly from abroad.
The new project is scheduled to be completed in December 2022.
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