Nestlé will invest EUR100m (US$97m) in one of its largest coffee factories, based in Spain, over the next three years, it has announced.
The Nescafé owner plans to up its production capacity of instant coffee and coffee capsules at the factory in Girona, Catalonia, and invest in technology to improve sustainability and logistics.
The Girona factory already serves the domestic market and exports “significant volumes” to Europe, America, Asia, Africa and Oceania.
In 2020, the factory exported 80% of its production to 59 countries including Switzerland, the UK, France, Greece and Mexico.
Nestlé told Just Drinks: “The investment will allow us to focus on the production and filling of soluble coffee based on spray dry technology and on the production of coffee capsules in line with the growth of the market.
“The 100 million to be invested in the focus areas will make the factory even more competitive on a portfolio point of view allowing further innovation deployments.”
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It comes after investment in Nestlé’s Asia and Americas coffee markets earlier this year when it opened its second coffee plant in Mexico in a project that cost $340m and created 1,200 jobs.
The Swiss giant described coffee as “the largest contributor” to its organic sales growth in 2021. In the company’s half-year results in July, it reported “high-single-digit” growth in coffee sales which it said was “supported by a strong recovery of out-of-home channels”.
The Girona factory, which began producing Nescafé Dolce Gusto in 2008, directly employs 870 people and the investment is expected to create more jobs. Nestlé said the number would depend on “market demand evolution”.
The factory’s director, Jordi Jaen, said: “We are very proud to attract this investment to the Girona factory.” He added that the investment “consolidates” the plant as a key player in Nestlé’s coffee production.
The announcement also comes with news of closure of the site’s decaffeination plant although Jaen said the reorganisation would not lead to job losses.
Nestlé confirmed: “The company will maintain employment for all those affected [42 people] with relocations to other position within the Girona factory. The rest of the employees will not be affected.”
The company has ten factories across Spain and also produces coffee in Reus, south of Girona.
It comes as Nestlé last week announced huge investment plans in India – its biggest investment in the South Asian country since it started manufacturing there in 1961.