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Interview with
Mr. Iván F. Zurita,
Executive President of Nestlé México
| Could you briefly outline the historical background of the Nestle Group?
Nestle was established over 70 years ago, originally importing products such as the famous Nestle condensed milk. From this point on, we studied the Mexican market and after the analysis we found that there was a huge potential within the Latin American market. Today, we have over 7000 employees and are aligned with the Agro industrial sector of which we indirectly employ a further 220,000. In Mexico, we have 18 factories, 33 distribution centers, producing more than 350 different products and our turnover was more than 1.8 billion dollars, with a total production volume over 500,000 tons. We process more than a billion litres of milk. We buy more than 40% of the national cocoa supply and 30% of the coffee production. Also, we process over 100 thousand tons of sugar annually. 99% of the primary materials that we use for industry are national and as a foreign food company, we are number one. We are active in all aspects of the food industry even in the areas where we are not number one but we are also in constant growth. On a yearly basis we invest more than 140 million dollars in which we believe to be a major supporter of the growth of the country. The philosophy of the company is based upon the quality of the personnel, of our products and our brands.
What are the most important brands and products in the market?
We have many brands such as Nescafe , a soluble coffee well known throughout the world. The products of Nido and Carnation, powdered and evaporated milk respectively. -La Lechera- condensed and sweetened milk. As far as international products are concerned, we have many chocolate brands and ice cream. We also produce Parma (meat products), cheeses, yoghurts, Kermato and Kern’s juices, culinary products (Maggi), an ample line of children products, and we bottle our Sta. María natural water. We are convinced that the consumer has the last word and are grateful to the long- term commitment to our line.
Although you have a vast and diversified line of products, do you have any plans to take on new brands
When there are companies as dynamic as ours, there is always the potential of attracting new markets and creating new products for various categories. For example, with soluble coffee, obviously, Nescafe will always be our brand. We could create various flavoured or aromatic versions but the brand will always be Nescafe. On the other hand, the Ice cream and frozen foods sector is very diverse as products enter and leave the market constantly. We recently acquired Consomate and Rosa Blanca businesses, which are important products in the national market and are incorporated in our portfolio of brands. We also took over Abuelita Chocolates and Carlos V. These 2 have always been popular in the market and we will maintain them as such with the same product, the best quality and the same personality. These brands are exported worldwide and principally to the USA, the latter having a nostalgic value to the consumer. Following our philosophy, we will always have new ideas and products globally.
As far as Nescafe is concerned, what is the underlining strategy in competing with other brands?
Nescafe is the most popular soluble coffee in the world. We are very aware that it is essential to provide the best quality to the consumer. We know and can identify the consumer within the market trends. Every country is known to us, we have analysed what the consumer wants and prefers in his coffee. Mexico counts with the most innovative and modern plant in the world, producing some of the worlds finest soluble coffee.
Can you tell us about your export program and the plans you have for the future?
Although we do have exports, our major concentration is the local market which is very large. Nevertheless, Nestle exported last years in excess of 100 million dollars. Three years ago, thanks to the many bilateral treaties such as NAFTA, we intensified our export program. We are presently getting ready for the year 2003 when the market opens up completely. At present, we are exporting 4% only of our total turnover. We are however aware of the great opportunities available for the future as we have a highly skilled workforce and the highest levels of productivity.
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Do you think that you will have alliances and markets to enter upon the completion of the European free trade agreement?
We are a European company and have many years experience within the European continent. Our headquarters is situated in Switzerland and we have full working operations in Europe. Therefore, we should see the beginning of the treaty as an excellent opportunity for expansion. Three years ago nobody spoke about new markets or the free trade agreement, this worked as a tool to move into the markets and conduct extensive research into the possibilities of creating operations in these markets. It is not the same to hear about potential markets as living and working hand in hand and getting to know the market by experience. We compete well in all markets as we learn about the culture and ethics of the people within them. We will surely do well with the opening of the new markets globally and our operations worldwide will be enhanced.
Present in over 80 countries, could you outline three of the advantages of investing in Mexico?
As far as turnover is concerned, Mexico is ranked 7 in the world for Nestle. We are the closest neighbours to the largest market in the world, the United States. We are also strategically situated for the Central and South American markets, which Mexico has a natural affinity due to its cultural identity. We can now act as bridge with Europe, what could be a better strategic position for operations than this! The workforce is skilled and ready for work. Add this to the speed at which Mexicans adapt to technology, we have an extraordinary package to offer. From an economical point of view the Mexican internal economy is stable, the commerce industry is balanced and although there is a free flotation exchange rate, there are strong reserves. On diverse aspects of the economy, tourism which traditionally supports infrastructure is doing well so to is the Petro-chemical industry. Government policy has seen to be stable in the past few years. Politically speaking, Mexico has entered into a phase of important maturity. With the opening of the world markets and politics moving side by side with the economy, everything seems to be moving smoothly. Thanks to our geographical position, we have taken the best of the business culture from the U.S. and have set ourselves up in a transparent manner to attract the worlds investors.
where do you foresee Nestle Mexico to be positioned in the next three years?
We have experienced over the last three years a growth of 10% and there is no reason to not improve on this figure. The markets and the economy are at great levels of maturity and under control than ever before. Our expectations are that Nestle will continue to grow progressively. We need to continue with our aggressive plan adding continuous quality and in the constant search for new products and markets. In short, I would say that we expect our turnover to be over 2.2 billion Dollars.
What has been your own most successful achievement with Nestle?
I have been with the company for 26 years I have a degree in economics with post-graduate studies in marketing from New York and a masters degree from Switzerland. I have worked in various areas such as sales, marketing and finance, and after a long and intense training program into the area of production. Nestlé is a company with more than 220,000 employees worldwide. Here, we are seen as a local company with "local taste". This is an equal opportunity company with a lot of room to grow in. The staff is monitored continuously and there is no limit to growth within the company. The limit is the one that each individual fixes for himself. I have spent the majority of my career in the Latin American markets Brazil, Chile, Argentina, Panama. Emerging economies are always in motion. We have implemented a plan of support for hospitals, we created a Nestle prize for nutrition and we collaborate with the Ministry of Education a work experience program, where we send the recruits to Europe. By birth I am Brazilian and also Swiss by nationality.
What would be your final message to our decision- making audience?
Mexico, undoubtedly offers many, many opportunities: Not only for investment but for the quality of its people and the country. As a multi-national company, we understand the value and the consistency that is needed for investment. The country is in need of investment in the energy sector and the basic infrastructure of industry, so as to face its sustained continuous development. The government has done the utmost to ensure the opening of the economy and to allow full integration into the world economy. This a long term investment country but the opportunities are here. Without doubt I strongly recommend Mexico for any type of investment. |
© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Mexico published in Forbes Global.
July 3rd 2000 Issue.
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MEXICO
