Nestlé Purina this week announced a US $225 million investment to expand its pet food manufacturing plant in the state of Guanajuato.
The Swiss multinational food and drink processing conglomerate has picked Mexico as a key partner of its growth strategy in Latin America. The new investment is intended to significantly enhance the company’s production in Mexico, according to the news site Reporte Índigo.
Mexico is the No. 1 Latin American market for Nestlé; its two facilities in Mexico (one in Silao, Guanajuato, the other in Cuautitlán, México state) produce over 200,000 tons of dog and cat food annually.
This makes Nestlé Purina the top supplier of pet food in Mexico, but the two plants have reached maximum operating capacity, necessitating imports from the United States to meet local demand, according to the trade magazine PetFoodIndustry.com.
The announced expansion of the existing plant in Silao, Guanajuato is aimed at reducing its reliance on intracompany imports so as to more efficiently serve the Mexican market, which comprises 45% of Nestlé sales in Latin America. Mexico is also the company’s fourth-largest market in the world.
Last year, Nestlé’s global sales of pet food exceeded US $20.8 billion. Its pet food sales are its second-biggest product category, only behind beverages and powdered drinks.
Nestlé revealed in a press release that the renovation in Guanajuato will allow for a third line of production for wet food and a fourth line of production for dry food. The expansion is expected to increase production capacity of dry food and wet food by 25% and 40%, respectively.
The investment will also result in the creation of 94 new jobs at the Silao plant which already employs 600 people. It is also a positive sign for the Mexican pet food market, which continues to grow, driven by rising pet ownership and increased demand for high-quality pet food products, according to PetFoodIndustry.com.
In the past 10 years, Nestlé has invested more than US $770 million in its Silao facility and the new investment will make the plant in Guanajuato the biggest of its kind in Latin America.
With reports from El Economista, Reporte Índigo and PetFoodIndustry,com
