Being Nestle third joint venture, this new factory has the potential to double Nestle current turnover of $135 million in the near term.
In a significant development, Nestle laid the foundation stone for a $55 million coffee and biscuits factory in a joint venture with Cuba, which marks the latest foreign investment in the island nation.
This will be Cuba’s third joint venture with Nestle and is reflective of Cuban President Raul Castro’s drive to attract foreign capital to stimulate economic growth.
Following the symbolic stone laying ceremony, Laurent Freixe, Nestle’s Vice President stated the negotiations for this project with its Cuban partners Coralsa and Mariel had taken only 18 months, a “record speed”.
The factory would begin operations at the end of 2019 and would manufacture coffee products followed by biscuits and other culinary products, said Freixe, Nestle’s head of head of Americas division.
Currently, Nestle has two other joint ventures, with one producing ice cream and the other bottled water and other beverages.
Once it becomes operational in 2019, Nestle’s Nescor goods will be offered in the domestic market and will be exported as well, said Freixe.
In 2016, Nestle exported Cuban coffee as a limited “Cafecito de Cuba” edition of Nespresso single-use brewer pods, including to the United States.
“It sold at an impressive speed,” said Freixe. “Within a few days that line was sold out, which shows the potential.”
However, before it begins exporting Cuban coffee, Nestle will first have to help Cuba increase its harvest which has seen a steady decline since the 1959 revolution, said Freixe.
In the medium term, the new factory has the potential to double Nestle’s turnover in the country from its current $135 million, said Freixe.