Nestle to Build New Multi-Million Dollar Factory in Cuba

Swiss firm Nestle is negotiating a deal with the government of Cuba to build a new $50 million to $60 million factory in the country’s Mariel special development zone, according to an announcement made by the company’s vice president Laurent Freixe in Havana Wednesday, Reuters and other news media organizations reported.

The new manufacturing facility will produce coffee, biscuits, and cooking products, Reuters’ coverage said. Nestle also is seeking to renew an existing ice cream production joint venture for 20 years.

“The idea is to create a new joint venture to produce and distribute these products mainly for the Cuban market, but also with the idea of exporting some products,” said Freixe in an interview with the news service.

In August 2016, Nestle began selling Cuban-grown coffee in the United States under its Nespresso brand after the U.S. State Department loosened restrictions on imports from the island nation.

“Talks are very advanced, now it is more a question of finalizing them and completing the issue of financing,” the vice president said in Reuters’ report, noting that the Swiss company would retain a 51% interest in the joint venture.

While some of the products are intended for local consumers and export, an influx of tourists visiting the country is also fueling the development of the Nestle factory, which is projected to begin operations in 2019 with a staff of about 300 people.

“Tourism is going to double in the coming years, meanwhile demand is today only partially covered by local production,” said Freixe, telling the news service that the firm’s sales in Cuba are on par with revenues elsewhere in Latin America.

Reuters said Nestle is also considering expanding two other factories in Cuba.

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