GUANGZHOU: The world's largest food company, Nestle, opened a new ice-cream plant in Guangzhou last Wednesday, the company's biggest in Asia.

The 250 million yuan plant will increase Nestle's ice-cream productivity in South China to 64 million liters a year, three times that of the former plant.

Nestle will put much effort into promoting its high-end ice-cream brand, Dreyer's, in the South China market in the future, according to Peter Brabeck-Letmathe, chairman and CEO of Nestle Group Worldwide.

Wuyang (Five Sheep) is a well-known local ice-cream brand in Guangzhou. Since it was purchased by Nestle in 1999, it has shown a fiercer competitiveness in the local market.

Brabeck-Letmathe said the group's strategy in China is to cultivate local brands but not swallow them up. Another example is Shanghai's Totole chicken bouillon, a brand that has become more and more energetic under Nestle's management.

Brabeck-Letmathe said the company has successfully coped with inflation, as the cost of raw materials rises.

"We have several ways to solve the problem, such as using substitutes and improving products' additive value," he said.

For example, Nestle is using rice as a substitute for wheat to make different food for children. On the other hand, Nestle has divided its milk power products into several types to cater to children of all ages.

"We have powdered milk for 3-year-old children, as well as another kind for 6-year-old children," said Brabeck-Letmathe. "The second kind will have lower milk content, but it is healthier for the older children."

"This is our recipe for lowering costs," he added.

At the inauguration ceremony in Guangzhou last Wednesday, Brabeck-Letmathe revealed that Paul Bulcke, the current executive vice president of Nestle, will be his successor.

"Our board of directors chose him," Brabeck-Letmathe said.

Bulcke is now responsible for some America zones, including the United States, Canada, Latin America, and the Caribbean.

He has worked for the group for almost 30 years, having gained plenty of management experiences.

Bulcke said he will still spare no effort to expand the group's market on the Chinese mainland after he takes the office in April.

(HK Edition 03/31/2008 page2)