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Nestle ramps up Nigeria raw material sourcing

STORY: Nestle’s businesses in Nigeria and other African countries are ramping up their sourcing of local raw materials.

This includes ingredients like starch and turmeric.

The move is meant to reduce foreign exchange exposure – a cause of concern for the sector.

Due to the health crisis and subsequent supply chain issues, consumer goods companies have increased efforts to bring production and sourcing closer to their markets.

And growing debt in many African countries has put pressure on foreign reserves and created currency volatility, making it harder and more expensive to import inputs.

Just last week, for instance, Nigeria’s central bank allowed the naira currency to drop as much as 36% on the official market.

Now the food giant, which has more than 2,000 brands including KitKat and Nescafe, is replacing imported corn starch in Nigeria with cassava starch.

It’s also developing local suppliers of vegetable and spices for some products.

And it’s told Reuters it has already helped seven local suppliers to boost capacity to meet their supply needs.

In a statement, the Swiss company said it is currently looking to expand its localization journey to Cote d’Ivoire, Cameroon and Senegal.

Rival Unilever told Reuters last month that foreign exchange worries were also a big factor in driving it to seek more produce from Africa.