Sustainable income: Established in 2012, the Nestle Paddy Club provides rice farmers in Kedah with sustainable income opportunities. The scheme has an average participation of 260 farmers in 2018, producing yield of 5.5 tonnes per hectare.
Although Malaysia ranks fairly well in the global food security index, it appears to lack the capacity to produce all of its food needs, especially agricultural produce, to fully support its population of 32 million.
The country remains heavily-dependent on imports to feed its people.
In 2017, Malaysia’s import bill for agro-food stood at RM51.3bil.
Last year, it went beyond RM52bil.
The ever-increasing import bill for agro-food does not augur well for the food security of Malaysia, which ranked 40th out of 113 countries in the Economist’s global food security index in 2018.
Amid such challenges, the government has implemented various initiatives to improve the food security of the nation.
And in line with the government’s effort, Nestle (M) Bhd has been actively playing its part in contributing towards building the nation’s food security.
Nestle Malaysia CEO Juan Aranols points out the group has been working for many years to improve its local supply of agricultural raw materials.
The Nestle Chilli Club, which began in Kelantan, has since 2018 been expanded to farmers in Cameron Highlands in Pahang and Kuala Langat in Selangor, bringing the total number of farmers involved in this scheme to 81.
“It is a very efficient way of meeting our own quality requirements and doing it with local supply. This provides better flexibility and ensures our value chain is less dependent on external factors,” he explains.
For instance, Nestle has schemes that grow rice in Kedah under the Nestle Paddy Club for the group’s infant cereal product, and chillies in at least three states under the Nestle Chili Club for its Maggi chilli sauce.
The group has also started reviving the coffee industry in Kedah under the recently launched Nescafe Grown Respectfully programme. The pilot phase of the project will see 50,000 Robusta coffee seedlings being donated to a target of 200 farmers to be planted across 100 acres of Felda land by 2020. Green coffee grown under this programme that meets Nestle’s stringent quality requirements will be purchased by Nescafe.
“This is how Nestle can bring elements that bring a competitive edge to our products, but also doing it in a way that brings value to society. This is part of our values of making a positive impact in the areas we operate. We embark on these activities because it adds value and gives new legs in keeping the brands relevant,” Aranols says.
“Malaysia has good conditions to diversify agricultural produce. We have started coffee farming because we reckon there are good conditions to produce the crop in the north of the country. These are opportunities, and if successful, they will contribute to the nation as well,” he adds.
While one can frame Nestle’s effort as part of corporate social responsibility, or CSR, Aranols notes the group’s contributions to food security also come with a business aspect and meaning to it.
“We see it as creating shared value, a fundamental part of Nestle’s way of doing business that focuses on specific areas of the company’s core business activities where value can best be created both for society and shareholders,” he explains.
“We empower local manufacturers to become Nestle vendors, equipping them with the capabilities to produce halal raw ingredients based on Nestle’s strict standards and requirements,” he says.
He notes that Nestle’s food security initiatives also support farmers to improve their yields, and thus have better livelihoods. And that is building a business in the right way for the country as well.
has been actively playing its part in contributing towards building the nation’s food security.
