Nestlé use of Batangas port spurs operational efficiencies

The use of Batangas port by Nestlé Philippines for export shipments of its Cabuyao and Lipa factories starting last September has resulted in faster movement of goods and reduced travel time, spurring operational efficiencies.

Nestlé Philippines chairman and CEO Juan B. Santos said the company shifted the two factories’ shipments from Manila to the Batangas port as President Arroyo called on firms with manufacturing facilities in Calabarzon to make greater use of the port, thus promoting regional economic development.

"We are happy that in our own way, we are able to help develop business in the region by using the Batangas port, and at the same time help decongest traffic in Metro Manila. The efforts of Batangas Gov. Hermilando Mandanas have facilitated the greater use of Batangas port by companies like Nestlé and we can only hope that more companies will follow suit in the near future," he said.

Santos said using the Batangas port has already resulted in several advantages for Nestlé:

• Compared to Manila, the Batangas port is 82 kilometers closer to the Nestlé Lipa factory, thus transport costs are reduced. Furthermore, the Star Tollway has reduced travel time to the Batangas port by 40 minutes:

• Unlike Metro Manila, there is no truck ban in the area, so shipments can move 24 hours a day, resulting in faster turnaround time for service providers;

• Clearing of Import goods by the Bureau of Customs is completed within the day, compared to two to three days in Manila ports;

• Cost of port services for Imports in Batangas is 23 percent lower compared to Manila ports; and

• The use of Batangas Port is expected to result in savings of at least P20 million for Nestlé in 2003, thus compensating for the recent increases in fuel prices, the Nestlé chairman added.

The Nestlé Lipa factory serves as the ASEAN supply center for breakfast cereals, exporting about $40 million worth of these products in 2002 not only within Southeast Asia but to more than 20 countries in Asia-Pacific and Africa.

The Cabuyao factory, for its part, is the ASEAN supply center for infant nutrition, with 2002 exports amounting to $33 million. This year, the Lipa and Cabuyao factories project 38 percent and 20 percent increases, respectively, in their export tonnages through the port.

The Nestlé Philippines CEO cited the Bureau of Customs for expediting shipments through the Batangas port, and American President Lines for sharing Nestle’s long-term view of the benefits offered by the port. For its part, Nestlé has committed weekly minimum shipments of 60 vans through the port.