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Aerial view of Nestl's


corporate headquarters
building in Vevey Switzerland.
Type
Traded as

Industry

Founded

Founder
Headquarters
Area served
Key people
Products

Socit Anonyme
SIX: NESN
Euronext: NESTS
OTC Pink: NSRGY
BSE: 500790
NSE: NESTLEIND
Food processing
Anglo-Swiss Condensed
Milk Company (1866)
Farine Lacte Henri
Nestl (1867)
Nestl and Anglo-Swiss
Condensed Milk
Company (1905)
Henri Nestl, Charles
Page, George Page
Vevey, Vaud, Switzerland
Worldwide
Peter Brabeck-Letmathe
(Chairman)
Paul Bulcke (CEO)
Wan Ling Martello (CFO)
Baby food, coffee, dairy
products, breakfast
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Revenue
Operating income
Profit
Total assets
Total equity
Number of employees
Website

cereals, confectionery,
bottled water, ice cream,
pet foods
CHF 91.6 billion (2014)
[1]

CHF 10.90 billion


(2014)[1]
CHF 10.02 billion
(2013)[1]
CHF 120.44 billion
(2013)[1]
CHF 64.14 billion
(2013)[1]
339,000 (2014)[1][2]
www.nestle.com

PROFILE OF THE COMPANY


Nestl with headquarters in Vevey, Switzerland was founded in 1866 by
Henri Nestl and is today the world's biggest food and beverage company.
Sales at the end of 2004 were CHF 87 bn, with a net profit of CHF 6.7 bn.
We employ around 247,000 people and have factories or operations in
almost every country in the world.

The Company's strategy is guided by several fundamental principles.


Nestl's existing products grow through innovation and renovation while

maintaining a balance in geographic activities and product lines. Long-term


potential is never sacrificed for short-term performance. The Company's
priority is to bring the best and most relevant products to people, wherever
they are, whatever their needs, throughout their lives.
BACKGROUND
Nestle was promoted by Nestle Alimentana, Switzerland, a wholly owned
subsidiary of Nestle Holdings Ltd., Nassau, Bahama Islands. Nestle is one of
the oldest food MNC operating in India, with a presence of over a century.
For a long time, Nestle Indias operations were restricted to importing and
trading of condensed milk and infant food. Over the years, the Company
expanded its product range with new products in instant coffee, noodles,
sauces, pickles, culinary aids, chocolates and confectionery, dairy products
and mineral water.
Nestle was incorporated as a limited company in 1959. In 1978, the
Company issued shares to the Indian public to reduce its foreign holdings to
40%. Its name was changed from Foods Specialties Ltd. to the current name
in 1981.The parent held 51% stake in the company as at 2000 end. It has
FIPB approval to hike stake by 10% and has been gradually acquiring shares
from the open market. Parent stake in the company as at 2001 end stood at
53.8%. The parent plans to continue hiking stake through open market
purchases.

Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading
branded food player in the country. It has a broad based presence in the
.

foods sector with leading market shares in instant coffee, infant foods, milk
products and noodles. It has also strengthened its presence in chocolates,
confectioneries and other semi processed food products during the last few
years. The company has launched Dairy Products like UHT Milk, Butter and
Curd and also ventured into the mineral water segment in 2001. Nestles
leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch
and Pure Life.

PLANT LOCATIONS
Nestle started its manufacturing operations with Milkmaid in 1962 at Moga
factory. Manufacturing of Nescafe started in 1964 at the same factory. The
company set up another factory at Cherambadi in Tamil Nadu, for
manufacture of infant foods, coffee etc. For almost two decades there were
no new additions of manufacturing facilities due to restrictive policy
environment. The company set up its Nanjangad (Karnataka) factory in 1989
and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory
started operations in 1995. The Company set up its sixth manufacturing unit
in 1997 at Bicholim in Goa

BUSINESS PRINCIPLES
Since Henri Nestl developed the first milk food for infants in 1867, and
saved the life of a neighbors child, the Nestl Company has aimed to build a
business based on sound human values and principles.

While our Nestl Corporate Business Principles will continue to evolve and
adapt to a changing world, our basic foundation is unchanged from the time
of the origins of the Company, and reflects the basic ideas of fairness,
honesty, and a general concern for people.

People first
Employees, people and products are more important at Nestl than systems.
Systems and methods, while necessary and valuable in running a complex
organization, should remain managerial and operational aids but should not
become ends in themselves. It is a question of priorities. A strong orientation
toward human beings, employees and executives is a decisive, if not the
decisive, component of long-term success.
Quality products
Our focus is on products. The ultimate justification for a company is its
ability to offer products that are appealing because of their quality,

convenience, variety and price -- products that can stand their ground even
in the face of fierce competition.
Long-term view
Nestl makes clear a distinction between strategy and tactics. It gives
priority to the long-range view. Long-term thinking defuses many of the
conflicts and contentions among groups -- this applies to employment
conditions and relations with employees as well as to the conflicts and
opposing interests of the trade and the industry. Of course, our ability to
focus on long-term considerations is only possible if the company is
successful in the struggle for short-term survival. This is why Nestl strives
to maintain a satisfactory level of profits every year.
Decentralization
Switzerland is home to Nestl's Swiss subsidiary, its international
headquarters and the registered office of Nestl's holding company, but
Nestl does not regard its Swiss headquarters as the center of the universe.
Decentralization is a basic principle of Nestl. Our policy is to adapt as
much as possible to regional circumstances, mentalities and situations. By
decentralizing operational responsibility, we create strength and flexibility
and are able to make decisions that are better attuned to specific situations in
a given country. Policies and decisions concerning personnel, marketing and
products are largely determined locally. This policy creates stronger
motivation for Nestl's executives and employees and a greater sense of
identification with Nestl's business. It is not Nestl's policy to generate
most of its sales in Switzerland, supplemented by a few satellite subsidiaries

abroad. Nestl strives to be an "insider" in every country in which it


operates, not an "outsider."
Uniformity
A very important concern at Nestl has to do with uniformity: how
consistent Nestl's principles, policies, rules of conduct and strategies should
be, and to what extent they should differ depending on the country,
subsidiary, region, branch or group of products. In general, Nestl tries to
limit the uniformity of its policy to a requisite minimum. This minimum is
then systematically enforced, unless there are compelling reasons in a given
market that justify deviation from policy.
Diversification
Nestl does not want to become either a conglomerate or a portfolio
manager. Nestl wants to operate only those businesses about which it has
some special knowledge and expertise. Nestl is a global company, not a
conglomerate hodgepodge. We regard acquisitions and efforts at
diversification as logical ways to supplement our business, but only in the
context of a carefully considered corporate marketing policy.
Nestl is committed to the following Business Principles in all countries,
taking into account local legislation, cultural and religious practices:

Nestl's business objective is to manufacture and market the


Company's products in such a way as to create value that can be
sustained over the long term for shareholders, employees,
consumers, and business partners.

Nestl does not favor short-term profit at the expense of successful


long-term business development.

Nestl recognizes that its consumers have a sincere and legitimate


interest in the behavior, beliefs and actions of the Company behind
brands in which they place their trust and that without its consumers
the Company would not exist.

Nestl believes that, as a general rule, legislation is the most effective


safeguard of responsible conduct, although in certain areas, additional
guidance to staff in the form of voluntary business principles is
beneficial in order to ensure that the highest standards are met
throughout the organization.

Nestl is conscious of the fact that the success of a corporation is a


reflection of the professionalism, conduct and the responsible attitude
of its management and employees. Therefore recruitment of the right
people and ongoing training and development are crucial.

Nestl continues to maintain its commitment to follow and respect all


applicable local laws in each of its

Research and development


The Nestl research and development centers have two main tasks: to create
new products and manufacturing processes and to improve those that already
exist. These centers play a key role in product safety and quality and also
have their role in conserving resources and protecting the environment.
Environmental concerns are an integral part of any development process to
ensure that our future commercial operations meet the desired criteria.

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The Nestl Research Center provides the scientific support needed to


prevent and solve environmental problems arising in the development
groups as well as manufacturing. In addition, studies are carried out to find
new ways of using industrial residues to create value added by products.
This will reduce total emissions and effluents.
The Nestl development centers prepare environmental impact studies for
new products and manufacturing processes. These cover all aspects, from
raw materials, through processing, to the final packed product. These
analyses provide additional elements for use in deciding whether to
commercialize a new product, or to introduce a new or modified process.
Foresight
At present, the world faces daunting questions about its ability to provide
enough wholesome food for everyone. Malnutrition and poor eating habits
are still serious problems in many developing countries. By 2100, the
world's population will double. Will it be possible to feed a world with so
many inhabitants? At Nestl, the big picture is all about feeding the world
and providing food and nutrition for an ever-growing population. Our
response to this situation is to intensify research, strive for innovations and
improve quality.
Flexibility and simplicity
The public's sense of the power and size of a corporation is often inaccurate,
for a company's power is limited by a host of factors including legislation,
competition, regulatory bodies and publicity. From a business point of view,
it is desirable for a firm to achieve the size best suited to a specific industry
.

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or mode of production. To be competitive internationally and make


significant investments in research and technology, a larger company has an
advantage. From a strictly organizational point of view, flexible, simple
structures work best and excessively large units should be avoided whenever
possible. In both respects Nestl has a natural advantage: Although it is a big
company, it is spread out over many countries and each of Nestl's factories
has its own management and responsibility.
Handling of raw materials
The Nestl Group is in principle not directly involved in primary production
of raw materials and other food ingredients. In general we use locally
available raw materials and purchase them either directly from producers or
through existing trade channels.
Raw materials have to meet clearly established quality criteria and are
checked for possible contaminants including environmental contaminants.
Our purchasing specifications comply not only with legal requirements but
go further to ensure highest safety and wholesomeness of our products.
Whenever possible we give preference to those goods for which
environmental aspects have been taken into consideration. In those cases
where the required agricultural raw materials are not available locally, but
the natural production conditions exist, we encourage local production and
provide assistance for cultivation and dairy farm management.
We support plant growing and livestock husbandry methods which:

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preserve and improve natural soil productivity and economize and


protect water resources

allow the lowest, most appropriate and safe use of agro-chemicals

use the least energy

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Marketing
Packaging
Manufacturing comprises all unit operations necessary to transform
perishable raw materials into finished products, with the aim to make them
safe and convenient for the consumers. The manufacturing activities of the
Nestl Group:

respect natural resources by efficient use of raw materials and energy

minimize waste generation and emissions

ensure environmentally safe disposal of all waste which cannot be


recycled.

Regular assessments of processing practices are carried out. These


assessments include:

evaluation of individual plant performance with regard to operations


which have an impact on the environment

definition of targets for improvement

review of plant compliance with local government regulations,


company environmental standards, as well as results achieved in
comparison with targets for improvement

full investigation of incidents which may affect the environment.

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Information on developments in environmental protection technology and


practices is disseminated as required to ensure that all plants are using the
most effective environmental practices for their type of processing. This
applies also for co packers.
Marketing and distribution
Marketing is based on the principle of satisfying consumer needs. This is the
foundation also for the environmental marketing approach of Nestl.
Environmental product claims in advertising, promotional material and on
packaging are in accordance with legal requirements, based on solid
scientific evidence and used in a serious and reasonable manner.
Our aim is to minimize wastage in communication, publicity and
promotional material, in particular through more precise targeting of
marketing activities.
Consumer promotions and merchandising material such as consumer offers,
instore promotions, display material, leaflets, printed matter, etc. take
environmental aspects into account.
This means due consideration of environmental impact in selecting both
materials and printing methods.
In distribution, energy efficient and pollution controlled methods are
encouraged wherever possible.

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