Consumer goods giants like Nestle, Dabur, Coca-Cola ready capex war chest
consumer goods companies including Nestle, Dabur, Coca-Cola, Mondelez and Procter & Gamble have lined up big investments in India to step up capacity and push more premium products despite an ongoing slowdown in demand, particularly for mass products.
Some of these firms are investing more than ever before as they are hopeful of a demand revival in the new fiscal.
«We are investing 7-8% of our turnover on capex, which is much higher than it ever was,» Nestle chairman Suresh Narayanan said. «Despite stress points in demand, there's a wealth effect phenomenon that is taking place… Stock markets have been booming and those at upper middle class and middle class, they feel good about what they are buying,» he said. «Food inflation is hurting but we are hopeful that once inflation abates, things will be better,» Narayanan said. The maker of Maggi noodles and Nescafe coffee has committed investments of ₹6,500 crore into the India market till 2025, over a five-year window.
Last fortnight, Dabur announced its second highest capacity expenditure in India, at ₹135 crore, for a greenfield plant in South India.
«We expect the demand situation to improve as we enter the new financial year; we are looking at both urban and rural markets to drive growth,» Dabur's chief executive Mohit Malhotra said. He said the new plant will address rural distribution, innovation and premiumisation, and growing demand in the southern region, which accounts for 18-20% of the company's annual domestic sales.
While demand for mainstream
