News: Nestlé Malaysia, a subsidiary of Switzerland-based food company Nestlé, will see a 75% increase in its production capacity for the ready-to-drink segment after the company's new Sri Muda factory in Shah Alam, Malaysia, is completed. The company's Sri Muda manufacturing plant is scheduled to become operational by Q414, according to Nestlé Malaysia's Finance and Control Executive Director Marc Seiler. Seiler added that the new factory will be established through investments from the company's capital expenditure (capex) of MYR280mn (USD85.64mn) for 2014. The company's investment in the Sri Muda factory will have an impact on its cost structure, but this will not reduce its profitability, due to the increase in production and sales volume from the factory over time, Seiler further added.
BMI View: GDP per capita in Malaysia is expected to grow by 97.6% from a forecast USD9,667 in 2012 to around USD19,000 in 2022. With more consumers having the purchasing power to buy new and non-essential products, soft drinks producers are likely to find a growing market for their products, particularly higher-value beverages, such as energy drinks.