By Bernie Cahiles-Magkilat
Nestlé Philippines has sourced P86.268 billion worth of supplies of goods from the locals in 2016 as the multinational company boosted its sustainability program by including more micro and small Filipino producers into their supply chain.
Ernesto Mascenon, senior vice president of Nestlé Philippines, in a recent presentation on micro, small and medium enterprises (MSMEs) in Nestle’s Supply Chain, showed that the company paid P86.268 billion to local suppliers in 2016 alone.
In that same year, the company’s sales hit P126 billion. The Swiss company, which has been operating in the country for the past 106 years, has established 5 plants across the country.
Mascenon also said that 42 percent of its MSME supplies come from indirect supply chain and 36 percent from MSMEs’ supply chain.
The company paid P188.079 million to communities, which hosted some of their supply chain producers.
Some programs that address societal needs are not captured under payments to communities but are part of operational expenses as programs are embedded in business operations.
Other payments under its supply chain program include payments to employees of P5.013 billion; payments to providers of capital of P18.248 billion; and payments to governments of P17.012 billion.
Accredited MSMEs in the company’s supply chain has average business size of P3 million. They are mainly supplier of services and indirect materials.
The world’s leading Nutrition, Health and Wellness company does not discriminate between MSME and large suppliers, but accredits them based on some basic corporate business principles such as human rights, responsible sourcing, compliance to environmental laws and water management, quality assurance and product safety, and Labor Code compliance and safety at work.
Most prominent in the Nestlé supply chain support is coffee where the company is known for its Nescafé brand.
Under the Coffee Plan, Nestlé has already distributed 11.7 million coffee plantlets and trained 10,000 coffee farmers every year.
It has also established multiple coffee buying stations nationwide.
Nestlé said that 57 percent of local coffee purchase is responsibly grown and sourced.
It reported a 165 percent increase in local coffee purchases since 2015.