Nescor S.A. – Cuba’s joint venture with Nestlé

The first stone of the Nescor plant was laid in the Mariel Special Development Zone during a ceremony on November 28. Photo: Prensa Latina

Dec 7 (Granma) The project, featured in the first edition of Cuba’s Portfolio of Foreign Investment Opportunities, presented in 2014, sparked the interest of Swiss multinational Nestlé.

Next came intense days of negotiations which recently concluded with the creation of Nescor S.A, the third joint venture between Nestlé and Cuba’s Food Corporation S.A. (Coralsa), in the Mariel Special Development Zone.

The project, involving a food processing plant, was initially limited to coffee production, according to Nelson Arias Moreno, Coralsa president, speaking with Granma International, and in effect still is – manufacturing and selling various well-known brands of coffee, primarily destined for the domestic market.

However, he noted that “the project was expanded to include the production of savory biscuits, candies, dairy and culinary products, as well as powdered foodstuffs. “It features, among others, the well-known Maggi products, well positioned in the Cuban market and which are currently imported. Through Nescor S.A. we are trying to produce them in our country and in so doing effectively substitute purchases from abroad, as this is the key objective of all Coralsa’s lines of business.”

That’s why all projects, similar to this one, begin with studies of the Cuban market, of demand trends, of the levels and value of imports, as well as an analysis of the potential of Cuban industry and human capital, according to Arias Moreno.

For example, he explained that from 2011 through 2016, the country spent around 28 million USD a year on importing 8,000 tons of coffee, and an average of 4.6 million on biscuits, as well as purchasing 1,000 tons of seasoning from abroad, a figure which has been continually rising.

As such, the Nescor S.A. project is looking, among other things, to be able to substitute imports worth around 100 million dollars after 10 years, according to Arias Moreno, who went on to note that the construction of the plant is a complex process, but should be ready to start production by 2019. Regarding supplies and raw materials, he highlighted the entity’s interest in promoting the use of national products, in order to build and support productive chains necessary for the country’s development.

The Coralsa President, also emphasized the importance of the joint venture with the Swiss multinational company, highlighting the confidence of the foreign partner in doing business with the island, positive experiences in the past (Coralac S.A., and Los Portales S.A), and Cuba’s investment potential.

Regarding other potential investments, according to Nelson Arias, there are four other projects in the advanced stage of negotiations, including a joint venture with Italian, Spanish, and Slovakian counterparts to manufacture fresh sauces, preserves, bottled water, soft-drinks, and beers.

Meanwhile, Coralsa is offering business opportunities linked to the production of cereals, soy sauce and associated products, as well as dairy products, the processing of fruits and vegetables, and fish farming.

Following the ceremony in which the first stone for the plant was laid, Nestlé representative in Cuba, Harold Hoffmann, speaking to Prensa Latina, stated that the firm has been an active collaborator in Cuba’s food industry.

He noted that the plant, expected to cost 55 million USD, will be able to produce 18,500 tons a year of a wide range of products destined for the domestic and international markets.

We want to create healthy products, able to satisfy local consumers, in this case Cubans, added Nestlé’s representative on the island, an international corporation with some 500 production plants worldwide.

The Nescor S.A. facility, measuring 13,000 meters on two levels, will be built in an area of 56,000 square meters in the Mariel Special Development Zone, and create jobs for the country, starting with 165 direct employees during the first year of production, and up to 260 later.

Nestlé Vice President and head of its Americas division Laurent Freixe made a three-day visit to the island to attend the foundation stone-laying ceremony.

The Coralsa enteprise group includes:

– Bucanero: Joint venture with Consorcio Cerbuco (AB Inveb). Produces and markets Bucanero, Cristal, Palma Cristal, Mayabeque and Cacique brand beers and malt beverages.

– Coracan: Joint venture with Canadian partner Reuven International. Manufactures and sells instant foodstuffs including, soft-drinks, jello products, custards, and mashed potatoes, among others.

– Papas: One hundred percent Cuban commercial enterprise. Produces and sells Findy, Pelly and Doña delicias brand snacks, sweet and savory foods, sauces, spreads, and seasonings, among other products.

– Stella: Joint venture with Italian companies Farmavenda, S.P.A. and Mazzetti Renato, S.R.L. Manufactures and sells chocolates, Lebon brand candies and boxes of Gustazo brand chocolates, as well as raw products and their derivatives such as cacao butter and liquor.

– Bravo: Joint venture with Spanish partner Provalca. Produces and sells Bravo brand meats, primarily cold cuts and hamburgers.

– Coralac: Joint venture with Swiss multinational Nestlé. Produces and sells Nestlé, Línea Azul, Sensación and La Fruta brand ice creams.

– Los Portales: Joint venture with Nestlé Aguas. Produces Ciego Montero brand soft drinks and bottled water.

– IMSA: Joint venture with Mexican firm IMEX. Produces Flor de La Habana, Polvo de Plata, and Diamela brand flour and wheatmeal.

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