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Jan 18, 2012, 02.00 PM IST
The world's leading nutrition, health and wellness company, Nestle continues to bet big on India. Nandu Nandkishore, the executive vice president of Nestle told CNBC-TV18 that Nestle is eying new segments and will soon unveil new products.
CNBC-TV18, Nandu Nandkishore, the executive vice president of Nestle
divulges the company’s expansion plans in India in the coming years.
Nandkishore further goes on to say that emerging markets are seen as
engines of growth.
Nandkishore maintains that Nestle’s core focus continues to be organic
Below is the edited transcript of the interview. Also watch the accompamying videos.
Q: You have professionally been outside of India for the last 15 years now. You are looking at all of Nestle’s emerging market operations at this point in time. There is a lot of pessimism with regards to the India growth story – a story that was potentially a double digit growth story is now perhaps a story that will at best do about 7-7.5%. Do you share the kind of pessimism that seems to be palpable at this point in time?
A: On a long term perspective, you have to be optimistic and you do
I was in Indonesia during the economic crisis of 1998 and it was a big
Q: If India is compared to Europe or the US, clearly, 6% is not a bad number.
A: It still remains a very interesting destination to invest and look
Q: You talked about how this region or this market is about 27%of
A: Difficult to say, your guess is as good as mine.
Q: I am sure you have some sense of the kind of growth that each of these regions is enjoying at this point in time. Isn’t it an
A: No, for the last few years this whole region has been growing at
Q: Analysts who study Nestle seem to suggest that while between 2008 and 2010, the company recorded a CAGR in excess of about 25%, we are now will see a deceleration down to the 19%-20% level atleast till CY13 in India. Is that a fair assumption?
A: I would not like to comment on specifics.
Q: I know you are in silent period, but is that a fair expectation
A: I would not like to get tied down to any specific numbers. It’s the
Q: But would it be fair to say that the period from now to 2013 would obviously not be as strong or as robust as the period between 2008 and 2010?
A: From my point of view India has been a growth story and will
Q: Inflation clearly has been the big challenge. We are now beginning to see inflation easing which could perhaps lead to the interest rate cycle easing as well which should get back the consumption story. What are the other challenges and headwinds that your local management is telling you about here in India?
A: The phrase that has been used with me is one of 'pragmatic
So, because the capacity is available you would expect that a lot of the pent-up demand that could not be fulfilled can now be fulfilled. So that's a strong argument for the continuation of the growth story. At the same time the argument against is to say - what if there is an economic slowdown because then you will have idle capacity. At this point in time, we are fundamentally optimistic but the pragmatism says yes, be optimistic, yes invest, yes be bullish, but don't get too far ahead of market demand. So you just have enough flexibility to grow.
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