Cuba to save $100m over 10 years in coffee imports

CUBA has projected to save US $100 million over 10 years in imports once the US $55 million joint venture with Nestle, NESCOR SA, is up and running.

On November 28, Nestle and Cuban food enterprise Corporacion Alimentaria, SA (Coralsa) started the construction of a food production plant in the Mariel Special Development Zone (ZEDM). The facility is expected to employ 260 people by 2020.

The plant will produce the world’s leading coffee brand Nescafe, the local Cuban roast and ground coffee Serrano, Nestle Fitness cereal based snacks, the Nesquik powdered beverage, as well as Maggi cooking aids. Yearly production capacity is expected to be over 18,500 tonnes in total for local consumption and export. The construction of the plant is expected to be completed by the end of 2019 and operations to start in the first semester of 2020.

Coralsa president Nelson Arias Moreno said before reaching agreement on the joint venture, parties studied the Cuban market, demand trends, levels and value of imports, as well as analyzing the potential of Cuban industry and human capital.

He said from 2011 to 2016, Cuba spent around US $28 million a year on importing 8,000 tonnes of coffee, and an average of $4.6 million on biscuits as well as purchasing 1,000 tonnes of seasoning.

Arias Moreno said the Nestle-Coralsa venture, named Nescor SA, was looking, among other things, to “substitute imports worth around US $100 million after 10 years.”

Nestle CEO for the Americas Laurent Freixe, who made a three-day visit to Cuba, said the new factory would help meet growing consumer demand and further strengthen “our presence in Cuba”.

Nestle country manager Harold Hoffmann said “this production plan represents a great opportunity to develop new categories with high demand in Cuban market. We seek to offer products with nutritional value in coherence with our nutrition, health and wellness strategy, while expanding the business in the region”.

Nestle has been in Cuba since 1908, growing significantly in the last 20 years, with plants destined to produce mineral water and carbonated soft drinks at Los Portales and ice-cream at Coralac.

Both are joint ventures with Coralsa. Currently, Cuba imports a wide range of Nestle products through a representation office Silsa Dominica SA. Nestle boasts of more than 2,000 brands from global icons like Nescafe and Maggi to local loved brands such as Milo and Nido.

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