Nestlé cut cost and time with modular factories

Posted on 15 Jul 2014 by Victoria Fitzgerald

Nestlé has created a blueprint for a new type of factory that can be built in half the time of a traditional one for almost half the cost.

The modular factory will be made of multiple pre-assembled ready-to-use sections, which will be brought to the site to be fitted together.

The average Nestlé factory takes between 18 and 24 months and costs between £20m and £33m to build.

The new modular factory could be complete and up and running, in less than 12 months, at a cost of between £10m and £16.4m.

The design is a further development of Nestlé’s current “box-in-a-box” concept already used in countries with challenging conditions.

In these, an existing structure, such as a warehouse, is used as a shell structure and a simple factory built inside.

Alfredo Fenollosa, Nestlé technical head for Asia, Oceania and Africa said:

“The model is a real evolution from the traditional bricks and mortar factories of the past.

“Big companies traditionally build solid stuff but the lighter structure of this modular factory concept represents a real mindset change for Nestlé.

“We hope to be able to apply it soon in countries in Africa, and in some parts of Asia.”

The modular factory concept removes the risk in investing in these parts of the world by providing existing infrastructure to build.

The factory can be expanded, moved or its function transformed without having to start from scratch.

The modular factory concept is designed to industrialise simple processes like repacking and mixing dry goods such as Maggi bouillon cubes, rather than creating more complex products.

New Nestlé factories will create local jobs and bring the firm closer to its customers and raw materials.

Nestlé has a long history of investing in Africa, opening its first factory, a condensed milk production plant in the South African city of Estcourt in 1927.

There are currently 25 factories across the continent and a total of 148 across Asia, Oceania and Africa.