Consumer spending to remain strong: Nestle


  • Business
  • Wednesday, 12 Mar 2008

PETALING JAYA: Nestle (M) Bhd expects consumer spending in the country to remain strong on the back of a well-managed economy, said managing director Sullivan O’Carroll. 

“Although we are, to some extent, reliant on what happens in the US, it would not really impact consumer spending very dramatically,” he said when asked if a recession in the US would affect consumer spending here. 

While he conceded that the US was a major export market for Malaysia, he felt the Malaysian economy was “big enough on its own to stand up without being reliant on the outside world”. 

On the performance of Bursa Malaysia which temporarily halted trading yesterday, O’Carroll said: “I think Bursa is just like any stock exchange around the world.  

“The market reacts to different news and different things happening. I think that is the sign that the Malaysian market is a healthy market.” Nestle shares closed unchanged at RM26 yesterday. 

Speaking after the launch of Nestle Professional, a globally managed business division dedicated to the out-of-home and beverage market, O'Caroll said Nestle expected double-digit growth in the number of operators by end-2009 from 50,000 currently. 

The new division was previously known as FoodServices Business Unit. 

“Dining out is today more a necessity, and as demographics continue to change and people’s lifestyles lead them to seek precious free time, the food service industry or out-of-home dining is becoming an increasingly important area of revenue growth,” said O’Carroll. 

He said the out-of-home segment was a growing market that the company intended to develop further. 

He added that today, Nestle was the global leader in the out-of-home market, which is worth an estimated 2,000 billion Swiss francs annually.  

“Nestle Professional is a significant business with sales of over 7 billion Swiss francs annually. In Malaysia, the value of this business is about RM11.2bil.  

“While Nestle is already the world leader in the food services sector, the group believes the overall market opportunity will be better tapped with a dedicated, segment-specific organisation,” he added.  

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