Swiss food and drink company Nestlé has announced a $42.88 million investment in a new facility located in western Ukraine.
Key Details
- Nestlé’s announcement comes after multiple attempts from Ukrainian President Volodymyr Zelensky to draw investors into the war-torn country.
- The Swiss company is one of the rare international companies that have decided to invest.
- “This is an important move for Nestlé, taken in a very challenging time for the country. We aim to create a food and culinary hub, ensuring incremental jobs and serving the needs of Ukrainians and all European citizens with high quality products,” Nestlé’s South Eastern Europe CEO Alessandro Zanelli says.
Why it’s news
Even as war continues in Ukraine, President Zelensky has begun seeking opportunities to spur the rebuilding process in the country. Not only has the war caused significant physical damage to the country and its people, but the Ukrainian economy has suffered a severe blow.
Ukraine’s economy is expected to be reduced by 35% this year, Reuters reports. The country’s infrastructure is also beginning to suffer, as evidenced by power blackouts rolling across the country due to Russian attacks.
Nestlé’s decision to invest further in the Ukrainian economy isn’t much of a shock. Already the company is established within Ukrainian borders. Approximately 5,800 Nestle staff are in Ukraine.
The new facility is planned to be built in Smolyhiv, a village in the Volyn region in northwestern Ukraine. When completed, the facility will add approximately 1,500 new jobs.
Production at the factory will focus on making instant food, soups, sauces, and seasonings.
“It is a proof of our commitment,” Nestlé chairman Paul Bulcke tells Fortune. “We want to show the Ukrainian people that they can count on us. We want them to know we are consistent in our beliefs and dependable in our commitment to them.”
Of course, a publicly traded company such as Nestlé, while adhering to its beliefs to support Ukraine, does need to put its shareholders into consideration. It’s a risky move to invest in a country that is currently at war.
Backing up a bit
Ukrainian President Volodymyr Zelensky is asking businesses around the world to contribute to the reconstruction of war-torn Ukraine.
Zelensky announced earlier this year that his administration had created a team of bankers and researchers to help the country as it asks businesses to contribute to rebuilding the Ukrainian economy.
The team, called Advantage Ukraine, asks foreign investors and businesses to see what Zelensky calls “the tremendous growth potential our country presents.”
Already the Ukrainian president says that the team has identified $400 billion worth of potential investment, including public-private, privatization, and private investment opportunities.
The European country has been well-known for its agricultural contributions, but Zelensky asks investors to consider the potential science and technology investments within the country.
Zelensky clarifies that he is “not asking for favors” from other countries.
“Our new program outlines investment opportunities that will unleash the economic potential of Ukraine while delivering growth for those who have the vision to invest,” he says.