By Chandeepa Wettasinghe
Mirror Business sat down with Nestlé Lanka PLC’s new Managing Director Shivani Hedge, who took over local operations on February 1st 2015.
She succeeded Ganesan Ampalavanar, who served in this capacity for 2 years before taking up the reins at Nestlé Vietnam.
Hedge was instrumental in bringing the Maggi brand to popularity in India, where she served as the Business Executive Manager – Food, prior to arriving in Sri Lanka.
She holds a Masters in Business Administration from the Faculty of Management Studies in New Delhi, as well as a Bachelor’s Degree in Economics.
She holds a track record of consistent business results built on her strong marketing and business proficiencies that complement her extensive experience in the industry.
As a result, she is also a member of Nestlé’s global Marketing Leadership Council comprising of selected senior management officials from both Nestlé headquarters in Vevey, Switzerland and across the regional markets.
What has been your experience with Nestlé so far?
I’ve been with Nestlé for almost 30 years. I joined as a management trainee with Nestlé India, and over the years have been through various assignments, including starting off as a van salesmen covering sales operations, been through human resources working on the Nestlé professional business and now of course, here in Nestlé Sri Lanka, where I took over operations at the end of January.
Are you still feeling your way through the operations in Sri Lanka?
Well, I feel very much at home. The one thing is that, being in Nestlé, wherever you are, it’s a company that has very deep roots; which has a very strong culture.
So within the organization you feel very much at home. Specifically on Nestlé Sri Lanka, in the past 2-3 months, I feel that we have a company which has a lot of potential. The way I express it to our staff here is that, it is linked to what you see in a packet of our product Nestomalt; ‘Power, Strength, Energy.’ So, I think as a company we have a lot of potential, because we have powerful brands, we are a strong company in Sri Lanka, and we have a lot of people who have a lot of energy to achieve things with a very positive attitude. So that is where my confidence in the opportunity lies.
How important is Nestlé Sri Lanka to Nestlé’s global operations both strategically and financially?
Firstly, Nestlé Lanka is very deep rooted in terms of local culture. We’ve been here for over 100 years now, and we’re here for the long term.
In terms of the size of the company, we’re still small in the global context, but we’re an emerging market for Nestlé. We have to be a growth driver.
We need to accelerate and we have to contribute to the overall vision that we have for Nestlé globally, which is to become a leader in nutrition, health and wellness, and I think Sri Lanka can play a very powerful role in that vision.
Financially, it’s small, but I think the important thing to remember is that it’s an emerging market. It’s a market where the per capita consumption of Nestlé products is very high compared to many other markets, particularly in the South Asian region.
We also export a lot of products. I think as far as exports go specifically, we’re the only country that produces Maggi Coconut Milk Powder, and we’re exporting it to several countries across the Nestlé world and other organizations. So we are manufacturing products which are suited for the local consumer, but are relevant for markets outside, and of course, we’re the only market that makes Nestomalt. So it’s certainly a strong contributor and will drive growth for sure.
Few years back, Nestlé Lanka announced an ambitious Rs.10 billion plan for Sri Lanka. What is the current position of that plan?
We’ve so far invested about Rs.4 billion. As I mentioned, we’re here for the long term in this country. We have made a few investments in state-of-the-art manufacturing facility in Kurunegala. In addition to that, I would specifically say that we’ll continue to invest in brands. We’ll continue to invest in people, and with this, I see that we’ll have to invest in capacities as well. It’s a journey that we’re on, and we’ll continue to do that.
There had been much controversy about milk related products during the last couple of years. Did it have any impact on the performance of Nestlé Lanka?
We in Sri Lanka are committed to the development of the dairy industry.
So, a lot of work has been going on in the past 3 decades in collecting fresh milk from farmers here.
Today, we’re collecting milk directly from 18,000 farmers across the country. In addition to just milk collection, we’re providing the farmers with assistance, by way of training, assistance with micro financing, technology, etc. So, we are committed to the local sourcing of milk. Consequent to this, our dairy products are made with local milk, and most the issues that arose were from milk outside the country.
So, no dairy products are imported?
We have some specific ingredients, which are important. But the dairy range is all created with local milk.
Do you think Sri Lanka’s current dairy supply will be enough to support Nestlé’s expansion?
I would say that we’re getting the milk required. Currently we’re collecting about 62 million litres of milk, and it’s been in an upward trend in the past couple of years. We have expanded our network of milk collection over the years.
We started this 30 years ago, and over time we’ve gone to more and more geographies to collect milk, when many other organizations were not able to go.
Nestlé has a wide range of food and nutrition products. But here Nestlé Lanka offers only a few. Any plans to expand the local product portfolio?
We’re constantly looking at our product portfolio, and the starting point for expanding the portfolio comes from a deep understanding of the local consumer. So, we’re investing a lot in understanding the local consumer; what are their nutrition needs, how those needs are evolving, and we will continue to introduce products that are relevant to the local consumer.
It is not really about bringing global products, but making local products to the requirements of the local consumer. We will also look at our existing products, and look at adding more value to them to improve their nutritional profile, whether they are imported or manufactured locally.
We’ve had a couple of new products in the last few years as well. We had a new launch in the Maggi Devilled noodles and the ready to drink Nescafe Ice Coffee.
With the income of local consumers increasing, are there opportunities for other products?
Certainly. There is a role for certain products which we manufacture externally. We’re already importing some of these products for the consumers. We have a range of breakfast cereals. We have a range of nutritional products for many including infants and diabetics, we’ve got NesTea which is made from instant tea produced in India, and Perrier mineral water which caters to the out of home segment in hotels and tea cafes. We will continue to look at opportunities like this. But at the same time, we need to look locally what is required by the local consumer, whether it is the nutritional needs or the trends that are taking place.
Are you just beginning to do this research?
We have already done some research. Recently we have done a large exercise to understand the nutritional landscape of the people, both from the product point of view and a lifestyle point of view.
We have tried to identify what are the pressing concerns of the mother with respect to her child, how the aging population is going to lead to different needs, what are the concerns with regards to lifestyles of kids, because we know kids today aren’t spending much time out in the field; they’re spending more time in front of the television, and we’ve also tried to understand the micronutrient deficiencies in the country. So our role will be to help in all this aspects and to assist the housewife in improving the nutrition of her family.
How has the response been the Nescafe Ice Coffee?
We’re getting a positive response. All our beverage brands are playing a role in our consumer’s life journey. We have Nestomalt, Milo and Nescafe. They meet different needs, and target different segments.
Some concerns have been placed on the levels of sugar in your beverages. Are there any plans to make them healthier?
We are committed to improving the nutritional profiles of product. And that happens through reduction of sugar; that is one of the factors, as well as looking at other public health sensitive nutrients.
It’s not just about reducing the negatives, but adding the positives as well. A lot of work has gone into both these areas. We have done a sugar reduction; a significant amount of sugar reduction on Milo as well as the other products.
Nestlé Lanka has been in the forefront of CSR activities. Anything more in the pipeline?
It’s wonderful to talk about CSR, because CSR is actually something we are committed to as a part of our philosophy. The entire exercise that we have done with the dairy industry is very much a part of creating shared equity.
In addition to that, something new you might have heard of in the recent weeks is what we’re doing in the area of encouraging our consumers to lead an active lifestyle. We want to be a leading health and wellness company, and we believe that it is driven not just by what the consumers eat, but the way they live as well.
So we have recently tied up with the Ministry of Education as well as the Athletics Association of Sri Lanka. We’re creating a programme which will encourage participation in sports for children in schools. There’ll be over 30,000 children taking part from Grades 3-5, and we’ll have programmes within the schools. This will be run by the Athletics Association, but of course, we’re supporting that initiative.
I think that this is a very important step we’re taking towards encouraging an active lifestyle in the country. We’re also sponsoring 6 different sports and their tournaments at the schools level, and we have the Nestomalt marathon.
Where do you see Nestlé Lanka in 10 years time?
Firstly, I’d like to say that my endeavor is not to look at Nestlé Lanka for the next 5-10 years. We look at the future in a longer perspective, and I’d like to say what we’re doing today is for the future.
To sow the seeds for what we can reap not just in the 5-10 years, but many more into the future. In addition to our global vision and becoming the leading nutrition and wellness company in Sri Lanka, we want to contribute towards the development of the rural economy. And we will continue on that journey. We are also constantly investing in our brands, which will lead to investments as we go along, whether it is in capacity or milk collection, we will continue to make investments.